Mexican metals recyclers seek scrap outlets

A mid-April report prepared by the Brussels-based Bureau of International Recycling (BIR) touches on challenges among Mexico’s nonferrous scrap recyclers as that nation undergoes its battle with COVID-19-related restrictions on business activities.

Mexico’s government announced a COVID-19 national emergency March 30 and ordered all “nonessential” businesses to close for the month of April, according to BIR. As has happened in other jurisdictions, the definitions of “essential” and “nonessential” were unclear and, as a result, Mexico’s metal consumers and scrap yards “have spent most of this month seeking clarity and liaising with their local [or] state governments in a bid to sort out all the confusion,” writes the bureau.

As of mid-April, nearly all of Mexico’s auto industry has been idled because of a combination of regulatory uncertainty and nosediving global demand. Thus, Mexico’s secondary aluminum smelting industry has followed suit, according to BIR.

Citing the Harbor Intelligence commodities analysis firm, secondary aluminum alloy ingot production in Mexico will be some 90 percent lower in April, coming in at around 40,000 to 45,000 tons.

Although domestic demand for aluminum scrap that typically goes to these smelters is reduced, the Mexican extrusion industry is continuing to operate and is thus creating demand for grades of scrap that go to that sector. Used beverage containers (UBCs) also have found some demand from buyers in the United States and traders trying to make up for poor collected UBC volumes in their own countries.

On the scrap collection side, some of Mexico’s scrap yard operators have decided to halt their activities, while others are working to reduced capacity in line with the lower volumes of industrial and postconsumer scrap, says BIR.

Although Mexican scrap still is demand from overseas buyers, export sellers are facing more volatile shipping schedules and, in some cases, space constraints on vessels or a shortage of containers.