Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Mexico’s metal recyclers are struggling to recover from the government’s national emergency decree related to COVID-19, announced March 30, which will cause aluminum alloy ingot production to decline over 90pc this month.


Citing the Harbor Intelligence, the Bussels-based Bureau of International Recycling (BIR) noted that secondary aluminum alloy ingot output in Mexico will decline over 90pc this month to around 40,000-45,000 t (36,287- 40,823 mt)


The federal government issued a decree requiring all non-essential businesses, including steel and mining, to suspend activities until April 30. However, there wasn’t much clarity about what constituted essential and non-essential businesses, resulting in Mexico’s metal consumers and scrap yards spending most of the month liaising with their state officials to sort out the confusion, said BIR’s report.


Additionally, Mexico’s automotive industry has suspended operations because of uncertainty and plummeting global demand. Consequently, Mexico’s secondary smelting industry, which serves the car industry, has followed suit, it added.


Despite there being almost no domestic demand for the aluminum scrap that typically goes to secondary smelters, the Mexican extrusion industry is still operational and has created some demand for extrusion scrap. 


Many Mexican scrap yards have either halted operations or are working at reduced capacity commensurate to lower industrial and post-consumer scrap volumes, said BIR.


Mexican scrap is still in demand from overseas buyers, but exporters are grappling more volatile shipping schedules and, in some cases, constrained space on vessels or container shortages.


Mexico’s crude steel production is expected to decline 10-15pc this year to 16mn mt compare to 2019 because of the COVID-19 crisis.



Leave a Reply

Your email address will not be published.