Lead Weight Ban – Mission Accomplished?

It’s official: lead balancing weights are no longer allowed to be used on passenger cars or light trucks. Although there is much talk about the possible negative impact of the end-of-life vehicle directive, today tyre businesses across Europe seem to have adapted to the new situation without any major difficulties. However, the new market conditions have also brought consequences for manufacturers and suppliers. As all the parties involved get up to speed, what has to be taken into account when changing from lead balancing weights to alternative materials? Tyres & Accessories examines the effects of this legislation and the steps that need to be taken by companies across the continent.

Stock keeping is a major priority at the moment. Everywhere in the tyre trade, and with both suppliers and manufacturers, the question remains on what to do with excess stock. The worst case scenario would be to find yourself with too much stock and have to scrap them – the word is this would only be worth £230 per tonne a compared with much higher raw material value.
Associations around Europe don’t believe, that the transitional period has or will cause any major problems. “The business has adapted in principle”, BRV, the German tyre trade association, acknowledges in an interview with Tyres & Accessories. Since lead balancing weights were forbidden from being used by the OEMs two years ago, the association has publicly called upon its members not to neglect the impacts of the end-of-life vehicle directive. Every company that hasn’t adapted its inventory management and hasn’t prepared for the changes that came into effect on the first of July won’t have much opportunity left in order to react.

Generally speaking, there are still three legal ways of solving the problem of excessive lead weight stocks. One way of solving the problem is sending extra weights back to the supplier. One of the biggest balancing weight wholesalers in Europe is Munich-based Tip Top Stahlgruber. The problem is: since 1 October 2004, the company has refused to take back balancing weights for passenger car and light truck wheels except “in cases of justified technical reclamations”. And since January 2005 even this exception doesn’t apply anymore.

Dionys Hofmann the world’s largest balancing weight manufacturer will only take back lead balancing weights for scrap value, explains Helmut Ringwald. However, the company’s sales and marketing director is convinced that those “lead weights that are still in stock in the tyre trade are the unusual types that hardly anybody will be able to sell”, not even in countries outside of the European Union. “All the fast moving weights have been used,” says Mr Ringwald.
Another way of getting rid of excessive lead weights is the legal disposal as waste. A company’ first contact could be the wholesaler that sold the respective weights. But disposal services or local authorities should also be able to help with proposed solutions.

However, the trade associations as well as wholesalers and manufacturers specifically warn dealers against the illegal of their stock and point to the heavy fines and strong controls that are in place. In these terms illegal disposal also means selling lead balancing weights across borders to countries within the expanded EU 25.

The third way of getting rid of excessive balancing weights is by using them on motor cycle or truck wheels. However, in most cases this is just a theoretical solution.

A rather practical consideration is the higher prices of alternative balancing weight materials such as zinc. Apart form the higher raw material costs (per unit) there are the additional costs incurred because of the extra time needed to explain the higher costs (about £5 per car) to the end consumer.

Whether and when the ban on lead balancing weights will come into effect for truck and motorcycle wheels cannot be foreseen. Currently there have been no discernible activities in Brussels on this subject. In this respect balancing truck wheels with alternative materials is particularly difficult. Lead will always be the most dense alternative and so this is a question that is unlikely to be answered quickly. Lead is 58.8 per cent heavier than zinc, the most popular alternative and consequently balancing weights have to be bigger than before. To what extent balancing weights made from zinc can be used on truck, is a case of practicality. And therefore there is some doubt that lead will be totally banned from the tyre business.

Balancing weight manufacturers have also adjusted to the new situation since the first decisions on the end-of-life vehicle directive were taken some years ago. “The change-over has been seamlessly managed and was started in July 2003 with the new Volkswagen Golf V,” explains Helmut Ringwald. Furthermore, Dionys Hofmann’s sales and marketing director highlights that it is the particularly high share (86 per cent) of deliveries that go to the German OEMs with production facilities in Europe that has made the transitional period as smooth as it has been. “This is why we have been the first manufacturer to offer a complete programme of zinc balancing weights”, he adds. Every year Dionys Hofmann produces about 450 million balancing weights and reaches an annual turnover of more than 50 million euros. Two years ago when the transitional period had just begun (Dionys Hofmann exchanged lead for zinc) lead balancing weights made up more than 90 per cent of its annual production (420 million units). The remaining 10 per cent were zinc. Current production has almost completely switched and now only 30 million lead balancing weights are produced annually.

“The costs for the change-over add up to about 10 million euros. This contains as far as necessary the exchange of machinery and production tools. Another cost factor will be the scrapping of millions of items that haven’t been sold yet,” Mr Ringwald continues. By and large these units are balancing weights produced for the original equipment market. The 10 million pieces that were still stocked at Dionys Hofmann in May 2005 are parts that were sold “within the European Union until 30 June 2005.” All in all Mr Ringwald told T&A that he estimates that there are “at least 50 million lead weights circulating within the EU”.

Although the manufacturer has had higher costs due to the end-of-life vehicle directive, it will also produce a higher turnover because much of the cost will be forwarded to customers and therefore to end consumers and the OEMs. “Selling the equal number of zinc weights as we have sold in lead would mean a doubling of our turnover,” says the sales and marketing director. At the same time zinc as a raw material is more expensive (relatively speaking). Production is much slower and every zinc weight has to be coated with special synthetics preventing it from corrosion. However, Mr Ringwald does not believe that sales figures will change now that the lead ban had begun.

Every year about 400 million balancing weights are sold on the European replacement market, 90 million of which are sold in Germany. The European OEMs buy an additional 200 million pieces every year creating a 600 million unit market, according to Dionys Hofmann. In total, the global market sells about 1.4 billion pieces every year.

Together with zinc as an alternative balancing weight material, observers expect that stainless steel will achieve a certain position in the market. That is why the German manufacturer Jansen & Buscher exclusively produces balancing weights from stainless steel (chrome/nickel). The company entered this market 16 years ago and is currently in the process of applying for a European patent on its steel balancing weights for which there is no other supplier at the moment in Europe. Over all there are two main advantages for stainless steel balancing weights, says Uwe Bettchen. Firstly, steel has a higher specific density than zinc. Therefore 10 to 15 per cent less balancing weights are needed in terms of volume, according to the managing director. Secondly, zinc weights are more expensive because they have to be coated. Stainless steel on the other hand is corrosion resistant.

Jansen & Buscher doesn’t produce any lead balancing weights and never has, not even for truck or motorcycle purposes. Weights are supplied as endless adhesive weights, in this respect nothing has changed since the German company produced lead balancing weights. The new stainless steel balancing weights are certified by the German TÜV, explains Mr Bettchen, and are rapidly reaching the market. In recent years Jansen & Buscher has produced and sold about 300-320 tonnes of lead balancing weights Europe wide. This figure has almost doubled since the company began producing stainless steel balancing weights (550-600 tonnes). The managing director believes that the European market will develop even further during the coming years. Consequently, the German manufacturer believes that in three years time it will sell up to 1,200 tonnes of stainless steel balancing weights (in Europe) which could lead to a market share of eight to ten per cent in Germany alone.