|Metal recyclers cautiously optimistic
While U.S. manufacturing has been declining over the past couple of years, there has been recent recovery in the automotive sector and some signs of life in construction. Thankfully, for metal recyclers, global demand remains relatively strong for both ferrous and nonferrous metals from countries such as India, Brazil and China,
Despite a slowdown in Chinese economic growth of 7.6 percent in the second quarter from decades of 10 percent average annual growth, demand for reclaimed metals and most prices remain at relatively high levels, despite periodic fall-offs. However, the long-term economic fundamentals that have supported rising commodity prices over the past decade are substantial. ...read more
Rubber recycling industry expects stability
U.S. tire and rubber recyclers can expect a more stable future after being buffeted by the ebbs and flows of economic recession and recovery in the last few years. The $1 billion industry had a 25 percent drop in revenue in 2009 followed by an increase of 26.9 percent in 2010, according to a recent report by market research firm IBISWorld. Overall, from 2007 to 2012, the industry averaged growth of 1.7 percent per year.
Now, however, demand for recycled rubber from construction and other industries is increasing. As a result, researchers are predicting more robust 2.4 percent growth in 2012, followed by an extended period of even better times. “We expect the industry to experience steady growth over the next 5 years, averaging 3.7 percent annually during that period,” said IBISWorld analyst Dale Schmidt.
That’s good news for the industry, which IBISWorld estimates to consist of 175 companies employing some 3,000 workers. These firms collect and shred used tires and rubber, then separate the shredded rubber from steel wires and other materials. Shredded tires may be used for fuel, or as aggregate for construction and roadway projects. Ground crumb rubber is employed to make rubberized asphalt and other paving materials, and is also incorporated in flooring, school playgrounds, running tracks and other applications.
Fuel is the dominant application. In 2003, according to the Environmental Protection Agency, almost 45 percent of scrap tires were used for fuel. Another 19 percent went to civil engineering projects, 8 percent was converted to ground rubber and made into products, 4 percent was employed in rubber-modified asphalt, 3 percent was exported and about 2 percent each was used to make stamped products and employed in agriculture, where they are used for mulch and other miscellaneous uses. The balance, about 20 percent, was disposed of in landfills in 2003, but today about 90 percent of scrap tires are recycled one way or another.
The supply of tires is steady, at about one scrap tire per American per year, and the industry’s recent volatility is due to slumping demand as the construction and manufacturing industries retreated during the recession, IBISWorld said. Schools and highway departments, two of the major users of recycled rubber for building, also retrenched.
Since the industry’s biggest revenue source is tire-derived fuel, sales to industrial markets is key. When used as fuel, each scrap tire produces as much energy as an equivalent amount of oil and 25 percent more than coal. Schmidt’s growth forecast is based largely on increasing employment of tires as fuel for industrial users. ...read more