WASHINGTON—The recession hurt the scrap tire market as it did most other businesses, and it changed the sector in ways to which the industry must respond, according to the Rubber Manufacturers Association's chief scrap tire expert.
"Our focus is shifting toward rubber-modified asphalt and to finding new and different markets for ground rubber," said RMA Vice President Michael Blumenthal. "This is where the future has to be."
Scrap tire recycling is one of the major success stories for both the tire and recycling industries. In 1990, an estimated 11 percent of scrap tires generated in the U.S. found a productive end-use. By 2007, according to the RMA, this figure had risen to 89.3 percent.
However, the association's 2009 and 2011 reports have shown a softening of scrap tire markets. In 2009, total scrap tire usage was 85.3 percent; in 2011, only 81.6 percent.
Of the 265.8 million scrap tires generated in the U.S. in 2011, the RMA said, 35.1 million, or 13.2 percent, were culled as used tires.
Of the remaining 230.7 million, 37.7 percent were used as tire-derived fuel; 24.5 percent went to ground rubber applications, such as asphalt rubber, rubber mulch, playgrounds and athletic surfaces; 13 percent were put in landfills; 8 percent were exported overseas; 7.8 percent went to civil engineering applications; and 8.9 percent went to other, or unknown, uses.
It was no surprise that tire-derived fuel commanded the largest market share. For years it has been the most robust scrap tire market by far.
In 2011, however, TDF usage was down considerably, according to Blumenthal.
"The recession took out a lot of TDF use," he said. "In the cement industry, a lot of the older kilns were using TDF. It was good for them, because it kept expenses down and burned more efficiently than coal or other fuels.
"However, the older kilns were less efficient in producing cement," he said. "When the downturn came, the older kilns were the first to be shut. They were not just mothballed, but closed—they will never come back into operation."
With the improvement of the economy, TDF use is beginning to increase again in pulp and paper mills and in industrial boilers, according to Blumenthal. But TDF use in the cement industry will continue to dwindle, he said.
Bleak times across the board
The drop in TDF was the overriding cause of the decrease in scrap tire usage, according to Blumenthal. "When you have a 40-percent drop in your biggest market, that's going to have an effect," he said.
But other scrap tire applications suffered proportionately, according to Blumenthal.
"When tax revenues go down, schools stop spending," he said. "That means no new playgrounds or athletic fields, and no new crumb rubber surfaces for them. When tax revenues go down, road construction gets hit, meaning no new rubberized asphalt is used.
"Asphalt rubber, mulch, playgrounds and athletic surfaces are the four biggest ground rubber markets, and all of them took a hit," he said.
Three factors—none of them necessarily good—offset the loss in TDF and other markets in 2009 and 2011, according to Blumenthal.
First, the sale of new tires decreased, in both the original equipment and replacement markets.
"People were keeping their cars and their tires longer," he said. "There were fewer scrap tires out there, mitigating the percentage loss of scrap tires used."
Second, the exportation of scrap tires to other countries removed about 8 percent of the total, or about 25 million tires, Blumenthal said.
Third, the economic downturn caused more scrap tires to reutilized as used tires, he said. While TDF remains a viable scrap tire market, new TDF users will be relatively limited, according to Blumenthal.
"We'll see good increases in TDF, but I don't think we'll see the levels of usage we saw in 2005," he said.
For that reason, ground rubber and the products that can be made from it must be the industry's future focus, he said.
Some sources are enthusiastic about the future of tire-derived aggregate—or TDA—for civil engineering applications, but Blumenthal said prospects for TDA are also somewhat limited.
TDA offers a low return on investment compared with ground rubber, he said.
"Also, TDA requires processors to store large quantities of tires and rubber, so the logistics are very difficult," he said.
TDA will continue to find use in landfills and in roadbeds in rural areas, according to Blumenthal. States such as Colorado, which still have large stockpiles of scrap tires, will use TDA in important projects, he said.