Crumb Rubber Shakeout Ahead?

Ever since the introduction of radial and synthetic compounds, tire recycling has been a tough business. Today’s modern tire is highly engineered and built to last 30,000, 50,000 and even 100,000 miles. Reinforced with fiber, steel and in some cases aramid and silica, the tire poses a unique challenge to recyclers who must separate the different fractions in order to get decent prices for the steel and rubber.

But even with all the hard work and effort that goes into this process, in many cases tire recyclers are finding that the prices they are currently getting for tire crumb are not very high. With a glut of crumb currently on the market, market observers say there could be a shakeout of recycled tire crumb producers on the horizon.

"Currently, pricing for crumb rubber is down," says Tiffany Hughes, vice president of marketing for American Tire Recyclers, Jacksonville, Fla. "Production is uneven with demand." Other crumb rubber makers echo Hughes’ statement. Recyclers who were once getting 50 to 60 cents a pound are now only getting about 40 to 50 cents a pound. And lower grades of crumb are fetching as low as 10 cents a pound, or even less.

Adding to the depression of the tire crumb market is the availability of tire buffings from retreading operations. The popularity of truck tire retreading has pushed about 182 million pounds of tire buffings into the crumb rubber stream. These come from the 30 to 33 million retreads generated annually in the United States. Since buffings are high quality, rubber-only scrap, they are more easily processed and in higher demand.

Buffings currently make up about 70 percent of the annual 260-million-pound crumb rubber stream. The remainder – about 78 million pounds of crumb rubber – comes mainly from whole-tire grinding operations that consume approximately 4 to 6 million scrap tires a year. Currently, there are 122 companies in the U.S. and 14 in Canada that produce tire crumb. Of these companies, 8 to 10 are producing about 80 percent of the crumb rubber in the market. "The rest are simply fighting for market share," says Michael Blumenthal, executive director of the Scrap Tire Management Council, Washington.

"The market is looking at a downswing," continues Blumenthal. He says that tire crumb companies are looking to sell equipment to downsize or get out of the market altogether. "It looks like there is going to be a shakeout in this market segment in the near-term future," he adds.

Part of the reason for the shakeout is that many of the firms ramped up operations based on the Intermodal Surface Transportation Efficiency Act of 1992 that mandated a certain percentage of crumb rubber in federally-funded roads beginning in 1995. The legislation was never enacted and is essentially dead. Even though the mandate is gone, a large portion of the recycled crumb market is still dependent on paving applications with about 40 percent, or 112 million pounds, of crumb being diverted to this segment annually. But it seems that there are not enough paving applications to go around. Companies that invested in crumbing operations for the sole purpose of supplying the asphalt paving industry are having to look elsewhere to sell their product.

While there seems to be an over-supply of crumb currently on the market, some in the industry say the glut is mainly with lower quality material. "I agree that there is a crumb rubber glut," says Mike Rouse, president of Rouse Rubber, Vicksburg, Miss., "but the glut is in sub-standard crumb, not high quality crumb." Rouse says the market is currently saturated with one-quarter-inch to the 35 mesh (about 0.02 inches) crumb. His company, on the other hand, produces a finer crumb in the 40 to 200 mesh range (0.0164 to 0.0029 inches).

Many people just entered the market to make a quick buck, and were "badly mislead" about the market potential, according to Rouse.

"Every segment within the market has its own standards for crumb, and you can’t just throw every tire together and grind them up," he says. "For one, each type of tire has its own unique compounding; and two, an application may require a finer particle size."

The crumb rubber market is certainly differentiated by product quality and size, adds John Serumgard, chairman of the Scrap Tire Management Council. "We are seeing high demand for top quality crumb in several areas, especially the Southwest," he says.

Rouse recommends that companies in the crumbing business maintain strict quality standards by having a dedicated material analysis lab that monitors crumb parameters. "Even for low-level products such as mats, you still need a certain level of quality," he adds. "I don’t worry about volume, I only worry about quality."

Hughes also recommends a quality assurance program, and says that her company’s product is tested by an outside firm.

This emphasis on quality can lead to a higher price for the material, according to Rouse, who says he is getting a decent price for his tire crumb because he can back it up with analytical data and assure the buyer about the material he delivers.

There are markets out there, but you have to have access to them, according to Blumenthal. Some emerging markets for tire crumb include soil amendments and top dressings where crumb is mixed with soil and other ingredients to provide a better growing environment for grass. Currently, there are two patented soil amendment products on the market that use crumb rubber. The first is Rebound, marketed by American Tire Recyclers, and the second is Crown III, marketed by Jai Tire Industries, Denver. Both are use-type patents that were awarded to the inventor of Rebound and to the University of Michigan for Crown III.

Because of the patents, a company cannot sell a similar product to golf courses or athletic fields. "A lot of research was done by the University of Michigan to make sure that the product was safe to use and viable," says Cornelia Snyder, president of Jai Tire, "and that is why the patent was issued. Anyone can add crumb rubber to soil, but if an organization buys crumb rubber from a producer without the patent, then legal action can be levied against both parties."

Currently, Crown III is selling for about $480 a ton, or 24 cents a pound. The company also has 27 dealers across the U.S.

Rebound has been on the market for several years, and is used mainly in high traffic areas, such as athletic fields and parks. The crumb acts as an aerator and promotes drainage of water, as well as preventing the soil from compacting. Unlike Crown III which is layered on top of the soil, Rebound is mixed into the soil.

Other markets include molded products such as mats, tiles, parking lot stops, railroad crossing pads, dock bumpers, carpet underlayment, other walkway type pads, and many other products that can be made out of rubber. Crumb can also be combined with another polymer for auto applications, such as truck liners, step pads and brake pads. Related to the asphalt paving industry are uses for athletic tracks and as an underlayment for artificial grass playing fields.

Snyder has these three recommendations for those seeking to start in the recycled rubber market today. First, establish your markets, she says. Many in the industry recommend that a recycler has at least three markets secured before starting to produce crumb.

Second, try marketing someone else’s crumb, instead of making a huge investment in equipment. With the glut of crumb rubber on the market, it should be easy to hook up with a supplier and get a feel for the market. Hughes supports that statement, and says the industry needs more brokers. "I know that I haven’t knocked on all the doors yet," she says, "and our company has a full-time marketing staff. Other companies put so much effort into the manufacturing end that they don’t have the time or money to adequately support their marketing efforts. We simply need more marketing people in this industry, because there are markets out there."

And third, don’t sell crumb as a recycled product, but as a product that fills a need.

It’s necessary to research the market carefully and exhaustively, adds Dave Emmerit, owner of Recycled Rubber Technologies, Somerset, Pa. "Find the market, then find the equip-ment to match that market," he says.

Emmerit’s company makes 18 different products that range from rubber bullet stops for police training to driveway patching material. His company can also colorize rubber pavement to match color schemes around pools and patios.

Another service that RRT performs is packing heavy-duty tires with a crumb rubber filler for use in harsh environments such as scrap yards, so the tires do not go flat. "We can do it for one-third the cost of buying a new tire," says Emmerit.

Other advances for the use of crumb include the use of recycled material in new tires. Michelin and other major tire companies are currently working on ways to incorporate more recycled crumb into new tires to reduce costs and meet recycled-content goals by the automakers. Currently less than 1 percent of recycled crumb is used in the construction of a tire. Michelin is now testing tires with more than 10 percent of recycled crumb by rubber weight. With about 13 pounds of rubber in a 20-pound passenger tire, Michelin is putting more than 1 pound of recycled crumb into its test tires. The tires are being tested by taxi cab fleets in two cities.

"We are very pleased with the testing to date," says Douglas Bell, director of corporate administration for Michelin North America, Greenville, S.C., and the company’s environmental manager. "We are looking to fit the tires on 1999-model-year cars at the earliest."

Bell says there are currently no long-term contracts with crumb suppliers, but any future supplier of crumb will have to meet Michelin’s quality standards and be approved just like any other supplier the company uses.

Another unique product comes from Aquapore Moisture Systems Inc., Phoenix. Fifteen years ago the company developed a soaker hose for watering residential plants and grass. The company will not say how much recycled crumb goes into the making of each foot of hose, but will say that it consumes about 3 million pounds of crumb rubber per year to produce the hose and 300 other products from recycled rubber, including landscape edging and false mulch. The company makes about 200 million feet of soaker hose a year.

Since the hoses are of high quality and have to withstand a certain water pressure, Tim Mannchen, vice president of marketing for Aquapore, says that the company is actually having a difficult time finding the quality crumb that it needs. "Currently, we are using four sources for recycled crumb," he says. "But we need more high-quality suppliers to handle our growth."

One of the suppliers is National Rubber Baker Materials Inc., Toronto, which operates a crumbing plant in Phoenix, and is considered to be the largest producer of crumb rubber in North America. But in fact, a lot of the crumb used in the Aquapore products come from retread buffings because of the quality required.

Mannchen has some advice for recyclers looking to market products from recycled crumb rubber. "You have to stand by your product," he says. The company’s soaker hose, for instance, comes with a seven-year warranty, and the company will replace it for free if there are any defects.

"Next, try to get a premium price," he adds. "Prove to the consumer that your product demands a higher price." The company took the landscape edging market from 13 cents a foot to 28 cents a foot by making the product more resilient and flexible with crumb rubber.

"And finally, look for alternative merchandising venues," says Mannchen. "Try listing your product in a catalog, for example. There are more than 2,000 catalogs in the U.S. that are targeted toward a wide range of industries and markets. It is not as complicated as trying to get your product on a store shelf."

With the virgin rubber price hovering just above $1 a pound, it would seem that recycled crumb rubber would be a good buy and in high demand. But recycled crumb is vulcanized, and, as a thermoset material, it won’t chemically bind without some kind of adhesive or another polymer. However, several companies claim to have special processes that break the tough sulfur bonds that are created during the vulcanizing process, or at least make the rubber more adhesive for molding. These processes – called "surface treatments" – include ultrasonic devulcanization, reactive gas surface modification, catalytic regeneration, chemical modification and microbes that reportedly attack the sulfur bonds on the surface of the rubber.

While all of these surface treatments promise to make recycled rubber more "virgin-like" or more adhesive in the molding process, most of the treatments have only been on the market for the last year or so, and the verdict is still out on their effectiveness.

Special binders also can help in the molding process. Uniroyal Chemical, Elmira, Ontario, has a urethane binder that allows the recycled crumb to adhere better in the molding process, according to the company. The binder is sold under the trademark name Royalbond. There are several other types of binders on the market as well.

With the constant flow of about 250 million scrap tires entering the U.S. market annually, there will always be ample supply. On the demand side, existing markets will have to be expanded and new ones created. Some point to a growing export market that could fill the void. Others say that many manufacturers are now starting to conduct research and development on recycled crumb.

Despite past events that have rattled the rubber recycling industry, Hughes believes that the market is slowly becoming more focused. "Producers and suppliers are sharing more information through associations and industry meetings," she says. "And that’s good – but more needs to be done."

The author is managing editor of Recycling Today.