2011 waste tire market report ed boisson may 15, 2012 calrecycle insert pictures here
TRANSCRIPT
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Outline
• Methodology• Key Findings and Trends• Exports Special Report• Implications for Market Development
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Energy | Environment | National Security | Health | Critical Infrastructure
Methodology
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Energy | Environment | National Security | Health | Critical Infrastructure
Methodology
4
Data Sources
Processor , Exporter Surveys
TDP Producer Interviews
TDF User Survey
Landfill Survey
Retreader Survey
Waste Tire Manifest System
Civil Engineering Team Data
Disposal Reporting System
Third Party Data/Reports
Anecdotal Information
Consolidated Flow Analysis
Follow-Up ConversationsCalRecycle Feedback
Draft ReportStakeholder Feedback
Final Report
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Interpreting Results – Things to Remember
• Use of CA Tires, Not Total Market Size• Documented Amount of CA Tires Managed, Not
“Generation”• Results Generally +/- 10% Accuracy• Retreader Buffings Not Counted• Diversion Rate Does Not Account for Residuals
5
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Energy | Environment | National Security | Health | Critical Infrastructure
Key Findings and Trends
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Energy | Environment | National Security | Health | Critical Infrastructure
Market Snapshot
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2011 Diversion Rate: 88% and Rising!
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
5
10
15
20
25
30
35
40
45
% D
iver
ted
Mill
ions
of P
TE D
iver
ted
and
Dis
pose
d
Number Disposed Number Diverted % Diverted
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Reuse UpExpect Flat or Slight Increase in 2012
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Crumb Rubber Up Slightly2012 Trend Uncertain
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Civil Engineering DownGrowth Expected in 2012
* Based on landfill surveys; not validated by CalRecycle
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ADC Up SharplyExpect Flat or Declining in 2012
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TDF DownExpect Flat to Slight Increase in 2012
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Disposal Down to Record Low* Trend Continuing in 2012
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Pass
enge
r Ti
re E
quiv
alen
ts
* Chart based on top 5 landfills receiving tires
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Energy | Environment | National Security | Health | Critical Infrastructure
Exports Special Report
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Energy | Environment | National Security | Health | Critical Infrastructure
10-Year Export Trend
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Industry Structure and Key Decision Points
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Economics*
Type of Facility Capital and Operating Costs
Revenue from Product Sales
Synopsis
Baler/Exporters • Low Investment in Equipment
• Low Operating Costs
• Rapid Inventory Turnover
• Currently Strong Pricing
Low Costs and Strong Cash Flow = Tolerance of Low Tip Fees
Established Processors (Especially Crumb Producers)
• High Investment in Land, Building, and Equipment
• Relatively High Operating Costs
• Slow Inventory Turnover Due to Seasonal Sales
• High Competition Reducing Sales Revenue
Relatively High Costs and Variable Cash Flow = Need for Strong Tip Fees
* Generalized,and simplified analysis for illustrative purposes only.
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U.S. Exports of Waste Tires and Waste Rubber to Asia, 2002 – 2011*
* Source: U.S. International Trade Commission, for Harmonized Tariff Schedule , Section 4004.
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U.S. Waste Tire and Rubber Exports vs. Coal Prices
* Source: U.S. International Trade Commission and World Bank Price Data.
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Industry and Market Impacts
• Baler/Exporters Expanding• Increased Competition for Tires• Supply and Tip Fee Pressure for Established Processors• Cement Kilns: Shift From TDF Revenues to TDF Costs
• So Far, Overall, Non-Disposal Markets Not Declining Due to Exports• Since 2009, Exports up 6.3 Million PTE and Disposal
Down 6.3 Million PTE• But Not a Perfectly Efficient Shift • Some Processors Disproportionately Impacted
• Continuing Trend May Reduce Tires Available to Other Market Segments Beginning This Year
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How Long Will Export Growth Continue? How High Will it Go?
• Drivers• High International Demand:
• Growing Industrial Production (Especially in China)• High Coal and Oil Prices• Renewable Power Regulations/Incentives• Forgiving Regulations and/or Enforcement in Some Nations• Developing Fuel Conversion Technologies?
• Attractive Economics• Current Pricing for Bales, Shreds and TDF• Cheap Ocean Freight “Back Haul” Rates to Asia• Simple, Low Investment Export Business Model
• Maturing Supply Pipeline
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Potential Export Constraints and Barriers
• Maturing of Asian Scrap Tire Generation and Management Could Offset Some Waste Tire Imports
• Coal/Oil Pricing Could Drop• Asian Industrial Production Could Drop• A Global Disturbance Could Reduce Cargo Container
Availability• Importing Nations Could Change Pertinent Laws and/or
Enforcement Practices• Expanded Sourcing from Other States/Countries Could
Dilute Demand for CA Tires• Export Market is Notoriously Volatile and Unpredictable
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Options to Address Export Issues
• Strengthen Permitting and Enforcement• Implement Incentives to Recycle Waste Tires in
California• Seek Legislation Requiring Notification of Waste Tire
Exports• Seek Federal Action to Impose Tariffs• Leverage International Waste Export Conventions• Encourage Voluntary Certification Programs• Accept that Exports May Play a Significant, Continuing
Role in California’s Waste Tire Management System
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Market Development Implications
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Market Development Observations
• Supply-Related Barriers Growing• Tire Supply and Tip Fee Pressures
• TDA Supply Challenges May Grow as Demand Grows
• Demand-Related Barriers Persisting• Need to Raise Awareness of TDPs and Benefits
• Need for Documentation on TDP Benefits
• Need to Promote TDPs Made from California Tires
• Need for Specifications Calling for/Allowing for TDPs
• Quality Standards, Best Management Practices
• Be Cautious About new Crumb Rubber Investments• Need to Document Imports, Total Market Size
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TBAP Industry Wide Projects
• Outreach• State Agencies
• Caltrans Product Approval Effort
• Local Agencies
• Federal Purchasers
• Private (Architects)
• Workshops and Direct Consultations
• Best Management Practices/Standards• Feedstock Conversion Progress Review• Annual Market Reports and Incentive/EPR Report• Conference, Proposed Venture Vetting
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Q&A and Comments
Send written comments on draft report by May 22 to [email protected]
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Comments on Tire Market Report
Final Report projected for release in July.