Learning to adapt

Learning to adapt

Features - Commodity Focus // Shingles

Shingle recyclers must find alternative end markets or adjust market strategies due to low oil prices and the lack of state mandates.

April 20, 2017
Hilary Crisan
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Over the last few years, shingles recyclers have been attempting to jump over a combination of large hurdles affecting their operations—lower oil prices and a lack state mandates or specifications. Because of these factors, shingle recyclers are struggling to find end markets for their products, with some stopping production altogether.

“The main factor is oil prices, specifically for asphalt cement. The price of asphalt cement has been cut in half in the last few years, and that lowers the value of recycled asphalt shingles (RAS) as a whole,” David Stanczak, vice president of sales for Southwind RAS in Bartlett, Illinois, says. “Many recyclers are in a situation where they’re stacking up their shingles because they can’t get rid of them when a few years ago, they couldn’t collect them because there was such a large need.”

Stanczak says recyclers are trying to push for more specifications from state departments of transportation (DOTs) and encouraging responsible use of RAS among contractors.

“One of the problems is that people may have gotten too aggressive with how much RAS they’re using and not putting the proper adjustments forward,” he says.

Until that changes shingle recyclers in the U.S. are testing alternative markets and working with state mandates to find a use for their stockpiled shingles.

“I think people will be looking for more opportunities in more markets to recycle,” Stanczak says. “I think long term, everyone wants to worth with RAS because everyone wants to save the material from going to landfills, and everyone realizes that they’re saving money from the roofer to the contractor to even the DOTs.”

FINDING AN ALTERNATIVE

For states that don’t mandate the use of RAS in their hot mix asphalt (HMA), shingle recyclers have a bigger challenge in finding end markets. In Brice, Ohio, near the state capital of Columbus, Jim Cotugno, owner of Green Earth Recycling, had to shut down his shingle processing operation.

“I can’t sell the material right now,” he says. “None of the asphalt producers will take it in Columbus, and the trucking is too much to bring it anywhere else. We’re sitting on a big pile of shingles, but we can’t sell them. We’re not accepting them and we’re not processing them.”

Green Earth Recycling started three and a half years ago. The company had a contract with an asphalt producer in Kentucky who decided to go with another recycling operation that opened closer to it. After losing the Kentucky contract, Cotugno says he was in talks to work with larger companies in Columbus, but once fuel prices dropped, “everyone said, ‘no, we aren’t even going to think about it.’”

“The first six months (of business) was concentrated on getting a stockpile together, then the next spring, we started to sell,” Cotugno says. “We sold about 10,000 tons (of shingles) for a year and a half, and then it just stopped.”

Before shutting down its shingles operation, Green Earth Recycling used Remus, Michigan-based Bandit’s Beast horizontal grinder to grind hand-sorted tear-off shingles. The shingles were then sent through a screener to get a 3/8-inch-minus grade, the specification requested by the Kentucky producers.

In terms of Green Earth Recycling’s business, Cotugno says he also processes some industrial waste—mostly light fixtures—but a large chunk of his business depended on shingles.

“(Processing light fixtures) keeps two guys busy and we pay overhead,” he says. “Shingles was the whole business, and since I have 40,000 tons of shingles on the ground, we just can’t close.”

In order to get his stockpile off of the tipping floor, Cotugno says he’s teaming up with chemists to develop a new end market for shingles. While he doesn’t specify his experiment, he says that once everything is finalized and patented, he will be ready to “share it with the world.”

“We got to do something with these shingles,” he says.

MAKING ADJUSTMENTS

For Southwind RAS, the recent climate of the shingles market created the need to make adjustments. While the Bartlett, Illinois-based shingle recycler isn’t as heavily affected by recent obstacles like Green Earth Recycling, an incident that occurred three years ago caused the company to rethink its strategy, and so far, it has held up.

“Three years ago, we ran out of shingles. Our customers had to wait because we were running out. After that, we adjusted our strategy to make sure we had them,” Stanczak says.

Southwind RAS started in Bartlett in 2009. In 2010, the company began processing and selling the material. Now, according to Stanczak, the company has expanded throughout the state of Illinois to southern Wisconsin and one location in Missouri.

The company has seen a recent decrease in volume due to lower oil prices, which lowers the demand for RAS. Contractors are using more recycled asphalt pavement (RAP) and only using RAS in specialized mixes like stone matrix asphalt (SMA) and what Stanczak calls polylevel binders or fine sand mixes used for road base.

“It’s effecting us,” Stanczak says. “We’ve had to get more aggressive in the market to try to stimulate sales pricing-wise, and [we’re] getting more creative and showing contractors how to put their design together and how to use RAS to save money.”

Illinois implementing what is known as the Illinois Flexibility Index Test, or I-FIT, in order to see how susceptible RAS would be to premature cracking. This test, Stanczak says, can cause contractors to shy away from using RAS in their mix designs.

“Contractors are concerned with RAS and having stiffer asphalt cements in it that would be more difficult to pass the test,” he says. “The FHWA (Federal Highway Association) is pushing this throughout the country to make sure states are understanding how RAS can cause premature cracking if not properly managing the mix.”

But Southwind is keeping its optimism by continuing its work with the Illinois Department of Transportation (IDOT) and promoting the use of RAS.

“We’re working with the DOT because the state does want them to work,” Stanczak says. “It saves money and can promote the use of sustainable materials in their projects. We still have a good supply of shingles and we’re pushing forward to collect.”

LOOKING FOR THE LIGHT

Despite Cotugno’s current situation, he also says that the future of recycling shingles still has a bright outlook for him. “I believe fuel prices will go back up and the market should come back around. I have high hopes,” he says.

If his experimental new end market comes to fruition, Cotugno says the alternative end market would help him and any recycler who is affected by fuel prices and the lack of state mandates.

“If we get that new use working, we’ll have a market that we can sell to that will be valuable to the whole industry,” Cotugno says.

Cotugno isn’t the only recycler looking for a light at the end of the tunnel. Stanczak, who also serves as the shingle recycling chair for the Milwaukee-based Construction and Demolition Recycling Association (CDRA), says members of the association who are shingles recyclers also are keeping their hopes high.

“I think, overall, the main recyclers will stay optimistic with the market,” he says. “They will continue to find new markets. With oil prices being low, there’s just a down turn. There is a cautious optimism because there have been people who have been impacted and because there are people out there who need to look for more markets or alternative markets.”

The author is assistant editor for Construction & Demolition Recycling and can be contacted at hcrisan@gie.net.