After a period in which investments were frozen awaiting a return to security and stability, depreciation of the local currency boosted Chilean scrap exports. Numerous recycling companies - especially those handling metals - reported encouraging numbers. Providing welcome jobs amid an unemployment crisis, recycling was in a protection zone - a relatively similar situation to other Latin American countries.
In March this year, however, Latin America was hit by the COVID-19 shock wave. On average, collections in the region plummeted by 30% and, in some cases, by up to 50% as a result of long quarantine periods. The recycling industry is now in crisis: empty yards; bulky collections; low demand from traditional destination countries; and thousands of informal recyclers with no income. And as if this were not enough, the oil price slump has devastated the recycled plastics market.
Exporters’ collections were delayed for 45-60 days as a result of stranded containers in India and other Asian destinations. In late May and during June, however, global markets began to show signs of recovery. Finally, the region’s consumers of recyclable materials were forced to reduce their demand given an imminent drop in their sales. Fortunately, countries like Brazil and Mexico are hinting at some lack of supply in late July, so hopefully this will boost their purchases once again.
On the positive side, this crisis has highlighted the real problems of recycling. Quarantines have forced thousands of tons of recyclables to be thrown away; people have not only witnessed this but are already taking action on the matter. The younger generations have environmental awareness in their DNA and therefore I see many opportunities arising in the coming years to continue growing and innovating in recycling.
Recyclers are expert navigators of uncertainty and have been doing this for many decades. We will continue to arrive at our destination ports, as we always have in the past.
Metales y Aluminios SA (CHL), and Asociación Nacional de la Industria del Reciclaje - ANIR, Board Member of the BIR Latin America Committee