The biggest COVID-related news has been the roll-out of vaccines: Mexico has managed to deliver around 350,000 doses to date but, in a country of 120 million-plus people, that is only around 0.3% of the population. Priority has been given to front-line healthcare workers - a sector that has suffered a disproportionate number of COVID deaths. Mexico has already recorded more than 140,000 COVID fatalities, with only three other countries recording higher numbers.
2020 was not the best year for Mexico’s automotive industry: car production contracted by 20% while sales made an even poorer showing in shrinking 28%. Of course, COVID played a major role in these figures but it is worth remembering that the Mexican automotive sector had been accelerating prior to the pandemic. Another major influence on sales was the lack of government stimulus in the face of the virus.
Most of Mexico’s domestic industry is going through a hard time but sectors geared towards exports are starting to feel a recovery. Orders for the automotive, extrusion and rolling mill sectors seem to be picking up. The challenge is having enough raw material to meet the ramp-up in orders. Scrap generation is tight following a poor 2020 and imports are complicated by container and vessel shortages.
In 2021, Mexico can be expected to increase its role as an importer of both secondary and primary grades of aluminium scrap while continuing to export most of its red metal scrap. Also this year, it will be interesting to follow the developing relationship between Mexico’s federal government and the incoming US administration. Despite the brash rhetoric from former US President Donald Trump, the political relationship between the two countries found a sweet spot in prioritizing a domestic focus over focusing on the neighbour. The new USMCA free trade agreement contains labour provisions which might prove to be a complicated issue with the new US administration.
Glorem SC (MEX), General Delegate of the BIR Non-Ferrous Metals Division