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Export Market Crisis

Jan 2015

By now you would have seen ATRA’s market alert detailing the export market crisis faced by Australian Tyre Recyclers for the End of Life Tyre (ELT) product; Tyre Derived Fuel (TDF).

In recent months global market conditions for fossil fuels that compete directly with TDF and the dramatic devaluation of the Australia dollar (AUD), in conjunction with the regulatory and commercial changes to key Asian destination markets have led to an unprecedented crisis in the Australian ELT market. This crisis has placed the legitimate industry to an unsustainable commercial position.

In summary the key points impacting our ELT market and the key consequences of those impact are detailed in the full ATRA market alert (link below) and are as follows:

  1. Coal price reduction.
  2. Gas price reduction.
  3. AUD value devaluation.
  4. Boomerang Alliance have independently calculated the impact from these market conditions on the costs of managing ELTs for a recycler at a loss of 8.5¢ per EPU revenue and an increased cost of 26¢ per EPU – resulting in a revised average cost of $2.11 per EPU in metropolitan areas.
  5. The closure and/or restriction of key overseas markets for Australian TDF.
  6. Australian TDF competes globally against TDF from other markets the fall under product stewardship schemes where collection fees are significantly higher.
  7. Collection rates for recycling of other waste streams within Australia are markedly higher per tonne than the tyre recycling industry.
  8. TDF disposal has not been a profit centre for tyre recyclers, rather it was a preferable environmental and economic option to dispose of Australia’s ELTs. ELTs still have a negative not a positive value, therefore production of TDF offers the lowest cost option for responsible disposal.
  9. Other domestic market options for tyre-derived products are limited, thus TDF remains crucial for handling the volume of Australia’s ELTs.
  10. There is an increased risk of stockpiling and/or illegal dumping.
  11. The increased prevalence of the export of whole baled tyres.

For the full ATRA market alert click here.

As an industry leader we want to ensure we are driving the development of domestic markets for tyre-derived products as well as lean, efficient and safe manufacturing processes so we can guarantee our customers the lowest possible disposal rate, whilst ensuring sustainable operations. All of our representatives from myself, to Account Managers, Customer Service Representatives to our Drivers are available to field any queries that may have.

We look forward to continuing our strong trading relationships into the future.

Jim Fairweather