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Mexico

The Mexican economy continues to surprise with its resilience: GDP growth was 3.6% for the second quarter while the full-year estimate for 2023 has been updated to 3.3% from last month’s 3.2% and from 1% at the beginning of the year. Industry and mining, however, has not been a strong performer, growing only 1.4%, whereas the best sector has been agriculture with a 3.2% expansion.

Mexico’s auto industry continues to make headlines by establishing a new record for direct foreign investment; to date in 2023, US$ 5.43 billion has been invested in it. However, the growing presence of electric vehicle (EV) companies from China - a leader in EV production and penetration - is unsettling some US politicians and business leaders.

As for the recycling markets, prices of aluminium scrap required in the production of high-silicon secondary alloys continue to show resilience in the face of limited availability. Prices for mill grades remain depressed regionally but have been strongly supported by demand from the Asia-Pacific region. Copper and copper alloy scraps also continue to be well supported by export demand from Asia.

Meanwhile, a group of 14 US-based extrusion companies has filed a trade case against extrusion imports from 15 different countries, Mexico included. It is worth mentioning that Mexico has a negative trade balance with the USA when it comes to extrusions. This has been a rough year for the extrusion industry in the North American region, but tariff petitions and regional infighting may not be the best move given that the USA, Mexico and Canada invested significant efforts in cementing a trilateral free trade agreement intended to strengthen our region in the face of growing competition from China. Companies in the USA, Mexico and Canada have made significant investments on the back of this agreement, so to have these compromised by a group of companies viewing tariffs as its best business proposition does not reflect well on the leadership of our trade bloc.

The extrusion sector has been a leader in recycling investment and thus extrusion scrap has been one of the most resilient. Therefore, what happens to this sector is of interest to the recycling industry.

Our industry has to remain firm in its commitment to the free and fair trade of recyclable metal. This is not just a political principle; it is key to keeping the value of recyclables as high and as fair as possible, thus maximizing recycling rates and the CO2 emission savings resulting from our recycling endeavours. This principle should not be bent to cater to the interests of individual market players or to a group of regional players.  

In this light, we should celebrate BIR’s efforts to support free trade, including the publication of our world organization’s first position paper on extended producer responsibility (EPR) which calls for policy-makers to ensure that EPR schemes are designed in such a way that they do not disrupt existing efficient markets.

If you have not yet read the paper, I encourage you to do so and, where necessary, to share with the broader community, including industry leaders and government. A better-informed public and government is a must to insure against ill-informed regulation trampling on recycling efforts.