Slow Your Roll
BY Sandy Lender
With the cost of virgin asphalt cement (AC) on an overall decline throughout 2014 and 2015, asphalt producers have had an almost reprieve when it comes to at least one material expense. I say you’ve almost had a reprieve because the price of AC has been difficult to stomach since 2007/2008. The curve toward more reasonable rates has brought costs closer to what 21st Century professionals expect to factor in when bidding an HMA design against competing products such as ready-mix concrete.
The lower virgin material prices have begun to influence producers’ decisions. An asphalt plant manager, who wished to remain anonymous, shared with me that his employer had him reduce the percentage of reclaimed asphalt pavement (RAP) going into commercial mixes; operating with higher RAP percentages had become pricier than operating with traditional virgin mixes. High RAP mixes don’t have to require high prices for drying, blending or adding rejuvenators if producers follow best practices and balance the ingredients appropriately. We’ll offer an article dedicated to the concept of rejuvenating oxidized ingredients based on a presentation at the 90th Association of Asphalt Paving Technologists (AAPT) annual meeting and technical sessions held in Portland, in the January edition of AsphaltPro, so let’s get right to pricing and practices here.
In mid-October, Bitumart’s Petrosil Media reported that Iran’s FOB bulk and drummed bitumen prices were down 25 percent since January of this year, and Singapore bulk bitumen prices were down 10 percent since the start of the year. That same roundup of reports expounded on lower bitumen prices throughout Europe, etc. This is indicative of bitumen prices around the globe and lowering crude prices. See the sidebar “Prices for Virgin Material Curve Downward” for coast-to-coast U.S. examples.
Asphalt contractors in Pennsylvania had become accustomed to asphalt prices across its 12 districts in the range of $688 per ton on the high end and $516 per ton on the low end in 2013 and 2014, according to figures you can review at www.pa-asphalt.org. The state entered 2015 with prices averaging $560.00 per ton, but the “current price index” for October 2015 showed material cost was down to $449.00 per ton for districts in Zone 1, $443.50 per ton in Zone 2 and $438.00 per ton in Zone 3.
The U.S. Energy Information Administration (EIA) reported Oct. 26 at eia.gov that wholesale spot petroleum prices closed at $43.19/barrel for West Texas Intermediate, $46.57/bbl for Brent and $43.59/bbl for Louisiana Light. EIA’s “Short-Term Energy and Winter Fuels Outlook” released Oct. 6 predicted little change in those prices for the beginning of 2016:
North Sea Brent crude oil prices averaged $48/barrel (b) in September, a $1/b increase from August. However, volatility remained high during September. EIA forecasts that Brent crude oil prices will average $54/b in 2015 and $59/b in 2016, unchanged from last month’s STEO. Forecast West Texas Intermediate (WTI) crude oil prices average $4/b lower than the Brent price in 2015 and $5/b lower in 2016. The current values of futures and options contracts for January 2016 delivery…suggest the market expects WTI prices to range from $32/b to $67/b (at the 95% confidence interval) in January 2016.
Equip Your Facility
For Cycling Trends
“The decrease in price of the AC has only helped enhance and focus customers on how they can get good return on investment in production equipment, plant processes, controls and more,” Lennie Loesch of Stansteel/Hotmix Parts, Louisville, Kentucky, provided. He shared that his company developed the Recycle Savings Calculator, which is a sophisticated electronic spreadsheet, a few years ago to help a producer figure how much recycling can help his or her bottom line.
“This calculator system permitted an asphalt producer to input the cost of the materials, plant, liquid AC, RAP, RAS and many other factors,” Loesch continued. “What this illustrated is that liquid asphalt prices could decrease 80 percent from their historic high price level, and still yield dramatic savings and payback on equipment investment for the contractor and producer. It’s a combination of savings from the savings of liquid AC, the aggregate, and obviously the environmental aspect of sustainability and putting the asphalt industry as the No.1 tonnage recycler of any industry in North America.”
One trend Loesch has noticed during the decrease of liquid AC prices is that many producers have found it not necessary to invest in all-new, dramatic changes of technology. “There can be a series of modifications and enhancements to their existing plants by technology such as adding another RAP or RAS bin to help them blend in more materials, install a comprehensive multi-function liquid AC blending system to help them blend various liquid chemicals and rejuvenators to help release any of the harder ACs in the RAP, or convert to a total plant control system to help correctly and homogeneously blend all of the ingredients for an excellent performing hot mix or warm mix.”
Jeff Meeker of Meeker Equipment shared that recent lower virgin materials costs has not lessened the drive for recycling equipment. “RAP production components have continued to be very popular with our customers,” he said. “Demand for RAP production components has increased despite the lower liquid AC prices.”
During this time, Meeker has seen an increase in the demand for its latest component for use with batch plants. “Meeker’s RAP PAK is very popular with batch plant producers,” Meeker said. He contends that, “with the RAP PAK, we have doubled” the percentage of RAP that batch plant owners can add to their mixes.
“This has given new life to batch plants because the batch plants can run high percentages of RAP like a drum plant, yet maintain its versatility to make multiple mixes quickly and easily.”
Dennis Hunt of Gencor, Orlando, described the UltraRAP™ drum from his company and pointed to the practice of fractionating RAP, which he sees more producers willing to do today. For the UltraRAP plant concept, fine RAP and RAS go in one collar and coarse RAP goes in the other. The UltraRAP drum is designed to accommodate mixes with up to 60 percent recycle.
Loesch likens the selection of “the most successful equipment component” for handling mixes with recycle to selecting how a person should exercise. “It depends on a lot of circumstances and options available,” he shared. “We try to look at each individual existing plant and try to help the company get its maximum return on investment whether it’s RAP, recycle equipment, electronic control systems or other items. RAP has long been a great generator of revenue and savings for the contractor; first of all, it can be very dependent on the governmental unit wherein the company operates. There are still many states or provinces that limit the amount of RAP that can be added into a process. On the other hand, Stansteel has some customers that are recycling at over 50 percent and some that are using 50+percent of RAP and 7 percent of shingles. By doing this, they have an incredibly low cost of production. But this combination of either limiting the use or allowing for only certain mixes can be very site specific.”
Loesch breaks it down into batch plant and drum mix plant categories.
Batch: “In the case of batch plants, the product that seems to give a great return is the Stansteel Reverse Weigh and Proportioning System that permits the contractor to weigh the RAP—or RAS—directly into the pugmill and operate as a third scale operation on the plant.” By doing this, the higher percentages can be added while avoiding any steam explosion that might happen when slug-feeding RAP into the weigh hopper on a batch tower.
“Many companies routinely run 35 percent or more on their batch plants by using the Reverse Weighing and Proportioning System.”
Drum Mix: “On drum mix type plants, again, a lot of it depends on if it’s a new facility or modifying an existing. One of the products that has been most dependable for years has been the field proven Rotary Recycle Mixer™. [It] allows combining aggregates, liquid asphalt, RAP, RAS, liquid chemicals, dust and other ingredients in an environment without hot gases to burn or damage the liquid AC or create blue smoke. More importantly, it gives extended mixing and dwell time…This dwell time is important from the standpoint of combining ingredients and getting a soak time of the RAP, RAS and other ingredients so that it is a blended and quality product. Many of these are custom-designed to have even extended mixing times as opposed to some of the common drum mixers that only have an 8-foot or 9-foot area of the drum where they’re combining RAP, RAS, aggregate and liquid ingredients in less than a 9-foot or 10-foot travel length. In these units, they can sometimes be in the single digits in mixing and blending time vs. some of the advanced rotary recycle mixers that have over 100 seconds dwell time of positive and dynamic mixing and churning of the materials.”
Oftentimes, state agencies blame the effects of higher temperatures in RAP-heavy mixes as a detriment to specifying high RAP mixes. This shouldn’t be the case. Temperature isn’t the factor to change because temperature isn’t what gives full drying of RAP, thus full coating of binder. Drying efficiency is the factor to manipulate.
For some systems, that requires changing out the flights to correct the veil. For some systems, that means installing a longer dryer to offer longer dwell time. For some systems, the plant operator adjusts the speed of the drum’s rotation. With certain automation, the adjustment of drum speed can depend on what the system senses, rather than the operator’s estimate.
Take a look at the technology behind the V-Pack Stack Temperature Control System from Astec Industries, Chattanooga, as one example. The system is designed to extend the range of mixes a plant can produce without having to stop and adjust flights; the unique flights used have a deep V shape to accommodate multiple mix designs, and the system incorporates a variable frequency drive (VFD) to provide control of the drum’s rotational speed from a minimum of about 7 rpm to a maximum of about 12 rpm. Applications of the V-Pack Stack Temperature Control System enable Astec to provide asphalt plants that produce mix with RAP content from 0 to 70 percent without any physical changes to flights or other plant equipment and without loss of production rate capacity or fuel efficiency, according to the manufacturer.
Bringing recycling technology onboard has remained a priority for producers during this season of “better” virgin material pricing, and producers have seen the chance to restore coffers for future investments as well.
Loesch shared: “The other opportunity with the decrease in liquid prices is that it has helped many contractors be more profitable in recent months; therefore, they know there is always a wave and cycle of change to look at upgrading and investing in their existing operation to make it perform better in the more competitive environments. The decrease in AC costs has given savvy contractors a little reprieve with some extra time to research what they should do to decrease their AC costs for the near future because they know that AC costs will likely skyrocket again.”
It’s not gloom and doom—it’s a fact of life that prices increase over time. When crude oil, thus AC, prices climb in the future, producers know what to do.
“The No1. advice that Stansteel/Hotmix Parts would give customers is look at the technology and various options that are available to improve and modify existing plants….It’s not uncommon that a company can be much more competitive if it combines new and used equipment, or make either some major changes or planned and phased changes to the existing facility so they upgrade it to a state-of-the-art facility producing RAP, blending liquids, making the highest grade hot-mix and warm-mix that’s available in the industry. There are many plants that operate well under their capability and even a decades-old batch plant can be upgraded to a state-of-the-art facility that runs high percentages of RAP and that can alternately operate in a batch mode or in a drum mixing mode. It is worth the time to find out all of the options and alternatives.”
Meeker gets into the best practices for producers. “The No.1 piece of advice we offer our customers is to minimize the amount of moisture getting into the RAP as it sits in a pile,” Meeker said. “At Meeker, we also offer fabric buildings to our customers so they can cover their RAP piles. By minimizing moisture in RAP, it costs less money to dry, less steam, and plants can maximize RAP percentages in mixes.”
The technical paper T-129 from Astec points out that producers probably already have the equipment needed to tackle one of the easy ways to help moisture drain out of stockpiles: a grader and a paver. “No matter how efficient your plant equipment is or how well it is working, you can reduce drying costs by starting with drier aggregate,” George H. Simmons, Jr., wrote. “Thus, you need to reduce its moisture content before introducing it into the dryer or drum mixer.” The best stockpile to build is one that sits on a paved surface at a slight slope to the back, allowing the loader operator to collect material from the well-drained front face.
Whether or not the “better” materials pricing offered you a chance to evaluate your recycling operations, recycling equipment suppliers stand at the ready to help you plan for efficient use of high sustainable practices. All the usual suspects such as proper RAP stockpile management and best drying practices still matter, no matter what any of the material costs financially. When it comes to the environment, most of what the asphalt professional does has a carbon footprint value of low significance. Luckily for our industry, that dollar sign is lowered further by our sustainable use of a recyclable product in a green process. Next month, we’ll take a look at the green storage options available to take economic advantage of the lower dollar signs.