The recycling industry in Latin America is poised for significant growth, with projections indicating the overall recycling market could reach approximately USD 308 billion in 2024. This growth is particularly noteworthy in the scrap metal recycling segment, which is becoming increasingly important across the region, especially in Mexico, Brazil and Argentina.

In 2023, the Latin American scrap metal recycling market was valued at about USD 12.2 billion and is expected to grow at a compound annual growth rate (“CAGR”) of 4.9% from 2024 to 2030. In Mexico, the scrap metal recycling market is forecasted to reach USD 3.6 billion by 2030, while Brazil is anticipated to see its market size rise to USD 5.7 billion.

“Mexico is considered one of the world’s leading metal recyclers, with a considerable 54% of new steel products being made from recycled material,” informed a metallurgical industry consultant. A steel sector executive highlighted, “It is certainly a very complex issue and, at the same time, a sensitive one, because it is precisely one of the issues we have on the agenda with the government.” The executive noted, “Not only recycling, but also its export, which is closely linked.”

Globally, Latin America accounts for about 4.8% of the recycling equipment market, which was valued at approximately USD 1.36 billion in 2023 and expected to reach USD 1.87 billion by 2030. The recycling of ferrous scrap (any scrap metal consisting primarily of iron, steel, or both, but excluding any consisting primarily of stainless steel) has become a key issue for global steel production. “By increasing the use of ferrous scrap, the sector is taking effective measures to reduce CO2 emissions worldwide.” The steel executive expanded, “This is going to lead to an increasing strain on the world market, in fact, it is already happening.”

“Increasing the use of ferrous scrap...is going to lead to an increasing strain on the world market, in fact, it is already happening.”

Steel sector executive, LatAm

There is significant room for growth in Argentina, where the recycling rate is lower than in other countries. There are talks with the government so that it does not release the export of scrap metal, as this could put local producers at a disadvantage, considering that it is a strategic input. “It is very important to have modern legislation that promotes an increase in local supply, facilitates imports and allows the local producer to have access to the material already used, at competitive prices.” The executive expressed concern, “We have to foresee what is available now, make forecasts, see how supply and demand in the country may evolve in the coming years, how international trade is going to impact, in short, it is a very important issue that I believe is not being looked at correctly.”

Copper recycling is gaining importance due to its role in the energy transition, driven by its high thermal and electrical conductivity. Recycled copper is widely used in construction, machinery, industrial equipment, electrical power industries and transportation. “Argentina’s potential for copper production is enormous, considering the entry of 4 major projects in the next few years,” reported the executive. Additionally, Argentina’s automotive industry, one of the top 20 globally, also contributes to scrap metal production, underscoring the nation’s recycling prospects in both copper and other metals.

“Argentina’s potential for copper production is enormous, considering the entry of 4 major projects in the next few years.”

Steel sector executive, LatAm

There are many sectors whose growth could play a very important role in the future, not only the construction sector, whose link is obvious, but also the electrical, electronics and industrial machinery sectors, with the renewable energy market expected to grow to USD 1,977.6 billion by 2025.

Unfortunately, regulatory challenges vary significantly across Latin American countries, making it difficult for companies to navigate compliance and standards. “The steel industry is essential to support other sectors, so a misguided regulation will have an impact on the competitiveness of the entire economy.” The steel executive also acknowledged that “it will favour the development of the growth of the circular economy, which, as we know, is one of the pillars for achieving sustainability goals.”

In Mexico, the metallurgical industry consultant impressed that “the regulation seems to be robust and is even included in the national strategy for a circular economy.” Mexico’s circular economy strategy and supporting regulations have bolstered its global leadership and incentivised cost management. For Argentina though, “environmental officials tend to have one idea, industry officials have a different one, the committees dealing with these issues within the National Congress have other ideas,” told a frustrated executive. One approach, already adopted by around 60 countries, is to restrict scrap metal exports.

Looking toward 2025, Latin America’s scrap metal recycling market is set to maintain its growth momentum and remains central to the region’s commitment to environmental sustainability and the circular economy. However, the industry must navigate upcoming regulatory challenges to stop from going round in circles.