In what was its worst contraction in 40 years, Chile’s economy shrank 5.8% in 2020. Towards the end of the year, however, some light was visible on the horizon, leading to predictions of at least 5% economic growth in 2021. And in the first quarter, those growth expectations for this year have been raised to 6.2%. This projected increase can probably be explained by three main factors:
• Excellent progress with the COVID vaccination programme, with the aim of inoculating 80% of the population by June and thereby keeping the virus at bay while also giving a boost to all economic sectors.
• The amazing value of copper, with an average hovering probably around US$ 4 per pound this year, and its significant beneficial effect on the national economy.
• The consistent stabilization and recovery of global economies, encouraging the reactivation of businesses and industries in Chile.
The recycling industry has recorded better figures than for the same period last year. A second COVID wave hit the country in March and forced the entire population into strict quarantines but, as an essential activity, recycling has remained above 80% capacity on average. Most members of our association reported good results for last year and, until now at least, 2021 is seeming to stay on the same page. Of course, it goes without saying that the unpredicted commodities boom has brought back those long-awaited margins, mostly in the metals segment.
The great challenge for the export sector has been to diversify its destinations, dodging certain markets depressed by the pandemic. This has been particularly difficult with such a troubled maritime industry, with its route and destination closures, prohibitions on loading scrap metals, considerable rate increases, and so on.
Last but not least, Chile’s political health is not at its best and, as in some neighbouring countries, there is a lot of tension. Following the elections in May, the process of writing a new constitution has begun and this will undoubtedly bring several changes. The key to staying afloat will be the ability to adapt and see these changes as new opportunities.
Metales y Aluminios SA (CHL), and Asociación Nacional de la Industria del Reciclaje - ANIR, Board Member of the BIR Latin America Committee