- US tariff uncertainty impacts trade in Mexico, Uruguay
- Proposed metals export ban adds uncertainty in Brazil
Latin America’s steel and aluminium scrap markets face pressure from macroeconomic conditions, according to the latest World Mirror on Latin America by the Bureau of International Recycling (BIR). Compiled through contributions from BIR Latin America Committee members, the update highlights key economic, policy, and trade developments affecting the scrap and secondary materials markets in countries such as Mexico, Uruguay, and Chile.
Mexico: US tariff uncertainty hits aluminium scrap market
Alejandro Jaramillo, Glorem SC (MEX), Chairman of the BIR Latin America Committee
Mexico’s aluminium scrap market saw a sharp sentiment shift from early April to May, driven by macroeconomic slowdown and trade tensions. Prices initially dropped due to US tariff uncertainty (Section 232 and potential 25% hikes), hitting the used beverage cans (UBCs) and extrusion scrap markets hardest. Subsequently, a late-April pause in new tariffs and stable London Metal Exchange (LME) prices led to cautious buying and a slight recovery.
By early May, buyer interest rebounded for Taint Tabor and extrusion, supported by clearer US policy and currency stability. Export demand lifted prices for UBCs and extrusion, amid weak domestic consumption and falling industrial output – particularly in the auto sector, which recorded its worst Q1 since 2021.
With GDP growth revised to just 0.5%, domestic demand remains soft, but signs point to a mid-April market bottom. If conditions hold, clean extrusion and UBC demand may see modest gains.
Uruguay: Tariff tensions, LME price dip affect scrap trade
Nicolas Werba, Werba SA (URY), BIR Latin America Committee
Tariff-related volatility and a 10% LME price dip earlier this year made trading challenging in Uruguay. Meanwhile, shipping conditions have been improving, with fewer delays and more available space. However, since January, strict Basel permit rules for e-scrap exports have added costs and delays, making it hard to compete with informal recyclers smuggling material to neighbouring countries.
Chile: Poor coordination challenges EPR law implementation
Nicolas Fernandez, Metales y Aluminios SA (CHL), and Asociación Nacional de la Industria del Reciclaje – ANIR, Board Member of the BIR Latin America Committee
A year and a half into Chile’s Extended Producer Responsibility (EPR) law on packaging, targets remain unmet due to poor coordination between producer responsibility organisations (PROs) and recyclers. ANIR is proposing reforms to better align incentives and integrate recyclers into compliance efforts.
Delays in granting environmental permissions – over 500 projects pending, some for up to 10 years – continue to deter investment. However, major developments such as Michelin’s mining tyre recycling plant in Antofagasta and the $16-billion H2 Magallanes green hydrogen project show Chile’s potential in the sustainability industry.
Economic growth is projected at 2.5% for 2025-2026, with inflation expected to near 3% by 2026. The upcoming presidential election will centre on security, crime reduction, and the need for 4%+ growth.
Brazil: Legal, economic hurdles impact recycling industry
Roger Amarante, INESFA, National Recycling Association (BRA), Board Member of the BIR Latin America Committee
Brazil’s recyclers face mounting pressure amid economic decline, low margins, and unfavourable policies. Steel imports have hurt local industry, pushing recycled material prices down. A new law misclassifying recycled products as waste has disrupted imports, while a proposed export ban on metals adds further uncertainty. Combined with looming 28% taxes under a new reform, these measures are straining the sector and eroding business confidence.
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