International Monetary Fund also forecasts 9.1 percent 2020 GDP decline in Brazil.

In a mid-year report titled “A Crisis Like No Other, An Uncertain Recovery,” the Washington-based International Monetary Fund (IMF) has forecast a decline in gross domestic product (GDP) for 2020 that will outpace the global average.

According to the IMF, “Global growth is projected at minus 4.9 percent in 2020, 1.9 percentage points below the April 2020 World Economic Outlook (WEO) forecast. The COVID-19 pandemic has had a more negative impact on activity in the first half of 2020 than anticipated, and the recovery is projected to be more gradual than previously forecast.”

Relative to Latin America, the IMF has forecast a 9.4 percent GDP decline in its Latin America & Caribbean region. That includes a 9.1 drop forecast for Brazil and a 10.1 percent predicted decline in GDP for Mexico.

A collection of industry reports from scrap recyclers in Latin America, prepared by members of the Brussels-based Bureau of International Recycling (BIR), indicate industrial activity declined severely in the spring, as many nations there clamped down on away-from-home activity.

The figures for Latin America are only slightly worse than what the IMF is forecasting for the United States, where it predicts an 8 percent decline in GDP.

The international lending institution remains optimistic for 2021, predicting a return to GDP growth in Latin America and in the U.S. For 2021 it is predicting 3.3 percent GDP growth in Mexico, 3.6 percent growth in Brazil and 3.7 percent growth in the overall Latin America and Caribbean region. For the U.S., the IMF predicts 4.5 percent GDP growth.

Writes the IMF in its report summary, “As with the April 2020 World Economic Outlook projections, there is a higher-than-usual degree of uncertainty around this forecast. For economies struggling to control infection rates, a lengthier lockdown will inflict an additional toll on activity.”

In terms of recommendations, the IMF writes, “All countries—including those that have seemingly passed peaks in infections—should ensure that their health care systems are adequately resourced. Where lockdowns are required, economic policy should continue to cushion household income losses with sizable, well-targeted measures as well as provide support to firms suffering the consequences of mandated restrictions on activity. Where economies are reopening, targeted support should be gradually unwound as the recovery gets underway, and policies should provide stimulus to lift demand and ease and incentivize the reallocation of resources away from sectors likely to emerge persistently smaller after the pandemic.”

As of July 31, the United Nations’ World Health Organization lists more than 400,000 confirmed cases of COVID-19 in Mexico and nearly 45,000 deaths. The 854 deaths attributed to COVID-19 on July 30 are the most in the nation since July 23.

For Brazil, the WHO dashboard for Brazil shows nearly 2.5 million confirmed cases and more than 88,500 COVID-19-related deaths. Each day from July 23 to July 26, the country recorded 1,000 or more deaths attributed to the virus.

Association’s Latin America Committee says scrap export opportunities remain in place for recyclers in the region.

Four members of the Latin America Committee of the Brussels-based Bureau of International Recycling (BIR) have reported recent reduced scrap generation volumes in the region linked to efforts to reduce the spread of the COVID-19 virus.

Committee Chair Alejandro Jaramillo of Glorem SC in Mexico writes in a committee update released in late July, “COVID-19 has hit Latin America’s two largest economies -- Brazil and Mexico -- particularly hard.”

“With depressed demand, productivity within the Brazilian steel market remained low from February to May,” writes Roger Amarante of INESFA, the Brazilian Association of Iron and Steel Companies.

The situation was not as grim on the ferrous scrap export side, adds Amarante. “Despite the COVID crisis, exports [of ferrous scrap] from February to June were 15 percent higher year on year,” he writes. “This excellent news for Brazil’s recycling companies was partly due to a lack of demand from domestic plants and the closure of the U.S. and European markets.”

Nicolás Werba of Uruguay-based family nonferrous scrap business Werba SA says that nation has had better success containing the virus, but economic troubles persist. “Despite the fact that COVID-19 seems largely under control domestically, with an average of three new infections per day over recent weeks and 71 active cases as of July 8, the virus has left its mark and has generated many problems.”

Continues Werba in his BIR report, “The economic struggles of neighbors Argentina and Brazil have led to major private companies either performing poorly or remaining closed, thus also affecting scrap generation.”

Chile remains in the midst of its battle with COVID-19, says Nicolás Fernández of Metales y Aluminios SA and Chile’s Asociación Nacional de la Industria del Reciclaje (ANIR). “On average, collections in the region plummeted by 30 percent and, in some cases, by up to 50 percent, as a result of long quarantine periods,” he says of Chile’s situation in the late spring.

Adds Fernández, “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.”

Belgium-based metals firm says a “very strong performance” in its recycling unit helped offset overall weaker economic conditions.

Belgium-based smelting and recycling company Umicore says a strong performance in its recycling operations helped offset COVID-19-related impacts in its Catalysis and Energy & Surface Technologies business units.

“Against the backdrop of severe disruptions to society and business caused by the COVID-19 pandemic, Umicore demonstrated its resilience to extreme shocks and the complementarities of its business activities” in the first half of 2020, says the firm.

Umicore says it “achieved financial results broadly in line with those of the same period in 2019, with a very strong performance in Recycling offsetting the impact of the downturn in the automotive industry on the results of [the] Catalysis and Energy & Surface Technologies [business units].”

The company’s overall revenue fell by 4 percent for the first six months of 2020 to 1.6  billion euros ($1.9 billion) compared with the first half of 2020. Umicore says its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 5 percent in the first half to 376 million euros ($446.7 million).

States the firm, “Recycling recorded strong results reflecting increased activity levels, higher metal prices and favorable trading conditions. In addition, Precious Metals Refining benefited from a supportive supply environment and a higher availability of the Hoboken, Belgium, smelter compared to the first half of 2019, when the smelter underwent an extended planned maintenance shutdown of seven weeks.”

At its Hoboken smelter, Umicore says it melts and refines “precious metal-bearing materials such as byproducts from other nonferrous industries (e.g., drosses, mattes, speiss, anode slimes) [and] consumer and industrial recyclable products (e.g., electronic scrap, spent auto catalysts, spent industrial catalysts, sweeps and bullions).”

For the first half of 2020, Umicore cites “the contraction in the global car market” as a reason its revenue fell in its Catalysis operations, while “[r]evenues in Energy & Surface Technologies were impacted by a contraction of the global electric vehicle market, as well as lower activity levels in other key end-markets.”

Regarding the second half of the year, Umicore says, “Given the current evolution of the pandemic and the uncertainty it creates in Umicore’s key end markets, it remains impossible to provide a reliable quantified outlook for 2020.”  

The firm adds, “In Recycling, the first half performance should not be extrapolated to the second half, with the Hoboken smelter undergoing a four-week planned maintenance shutdown and seasonality effects in other businesses.”

Owner of AK Steel says its capital budget for the second half of 2020 includes keeping HBI capital spending in place.

Cleveland-Cliffs, which owns AK Steel and is involved in several other steel-related sectors, says its plans to build a hot briquetted iron (HBI) facility in Toledo, Ohio, were slightly delayed by the economic slowdown, but it still intends to invest in the project in the second half of 2020.

In comments accompanying the Cleveland-based firm’s second-quarter 2020 financial results, Cleveland-Cliffs Cliffs’ Chairman, President and CEO Lourenco Goncalves says, “As the market currently stands, we expect to see positive free cash flow in the second half of the year, which includes the capital spending necessary to complete the Toledo HBI project.”

A report released in early July by investment firm B. Riley FRB concluded that demand for the HBI produced at the Cleveland-Cliffs Toledo facility could be strong in the approaching decade, especially if prime grades of ferrous scrap are in short supply.

Regarding the outlook overall for Cleveland-Cliffs, Goncalves remarks, “Now that nearly all our facilities [that] were idled during the second quarter have resumed normal operations, during the second half of 2020 we will be able to demonstrate the potential of our new Cleveland-Cliffs footprint.”

Regarding the company’s integration of AK Steel into its existing operations, Goncalves says, “We have already implemented all the synergy initiatives we disclosed at the time of the acquisition, with the updated amount of $151 million coming in much higher than the original target of $120 million in synergies. In the second half of this year, we will finish the construction of our HBI plant, creating another highly profitable business for Cleveland-Cliffs in 2021 and beyond. At this time, based on our unique fully integrated and self-sufficient footprint, from iron ore pellets to highly sophisticated carbon and stainless steels and automotive parts, we are laser-focused on growing our business with our traditional automotive clients and on adding new ones from the roster of new manufacturers of electric vehicles, trucks and SUVs (sport utility vehicles).”

German waste and recycling company allies with Dutch plastics firm to boost food-grade rPET production.

Lünen, Germany-based waste and recycling services provider Remondis says it is working with Netherlands-based Morssinkhof Rymoplast to help beverage companies meet a European Union target of 25 percent recycled content in polyethylene terephthalate (PET) plastic bottles.

Remondis says its work with the Lichtenvoorde, Netherlands-based family firm is being undertaken to help the beverage packaging sector meet “the European Commission’s requirement for a higher recycling share in all PET beverage bottles (25 percent by 2025).” Adds Remondis, “The two family-run companies are investing in new processing capacities.”

In Zeitz, Germany, Remondis says it will “start up another expansion phase of its processing plant for PET bottles from the one-way deposit system this month.” And in Markranstädt, Germany, near Leipzig, Morssinkhof Rymoplast “will produce regranulates in a new preparation plant using its own successful MOPET process [starting in] January 2021.”

Remondis says pending approval by anti-trust authorities, the companies will “jointly offer the market high-quality, food-grade rPET regranulates under the name MORE PET GmbH, to enable closed material cycles for PET beverage packaging.”

Remondis describes itself as a leading service provider for the recycling, waste and water sectors, including being a service provider in the German container deposit system as an operator of sorting and extrusion systems for plastic packaging at several locations.

Morssinkhof Rymoplast describes itself as producer of “high-quality plastic recyclates, [and] one of the largest producers in Europe, operating several processing plants.”