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Value Chain Report on the Aluminium Industry in Mexico

Abstract

Mexico’s aluminium industry is atypical among major manufacturing economies: it has virtually no bauxite mining or primary smelting, yet sustains a dynamic downstream ecosystem driven by imports of metal and scrap, an efficient recycling sector, and world-class semi-fabrication and component manufacturing hubs that serve North-American automotive, construction, and packaging markets. This report maps the complete Mexican aluminium value chain—from international sourcing through secondary production and fabrication to end-use—analyses the principal corporate actors, quantifies key material flows, and examines the commercial logics that bind the chain together. Persistent dependence on imported raw material, volatile trade policy, scrap-quality constraints, and logistics bottlenecks constitute the main structural challenges. Nonetheless, Mexico’s proximity to the United States, its extensive industrial base, and accelerating demand for lightweight, low-carbon materials underpin solid growth prospects, provided that stakeholders address supply-side vulnerabilities and deepen technological upgrading.

Introduction

Aluminium at a Glance

Aluminium’s high strength-to-weight ratio, corrosion resistance, electrical conductivity, and near-infinite recyclability make it indispensable in contemporary manufacturing. Globally, the metal is produced via a two-step primary route (bauxite mining → alumina refining → aluminium smelting) and an ever-larger secondary route (scrap melting). In Mexico, scarcity of bauxite reserves eliminates the primary stages; instead, the industry pivots on imports and recycling, then adds value through sophisticated transformation technologies.

Purpose and Scope

This report synthesises the findings of two internal studies—“Value Chain Definition” and “Value Chain Analysis”—to deliver a single, publication-ready examination of Mexico’s aluminium sector. It:
• defines each link in the Mexican value chain and quantifies material flows;
• profiles the key corporate players and estimates their relative scale;
• elucidates the products, services, and commercial arrangements connecting actors;
• identifies critical bottlenecks and systemic challenges; and
• discusses prevailing business models and their strategic implications.

Value Chain Definition

Mexico’s value chain begins at the border, not the mine. Figure 1 (table) summarises the stages discussed in detail below.

Stage Main Activities Representative Players Approx. 2023-24 Volumes*
1. Importation of Primary Aluminium & Scrap Sourcing abroad, logistics, customs clearance, domestic distribution Trafigura; Glencore; integrated recyclers (ARZYZ, REAL ALLOY) ~2.7 Mt primary & scrap combined
2. Secondary Production (Recycling) Scrap collection, sorting, melting, alloying, casting or molten delivery ARZYZ (≈350 kt/y); AMISSA (≈120 kt/y); REAL ALLOY; Novelis MX National secondary output ≈950 kt
3. Semi-Fabrication Extrusion, rolling, forging, high-pressure die casting Nemak (600 kt Al processed); Cuprum (≈90 kt extrusion); Bocar, Dynacast, Ryobi Flat-rolled & extrusion ≈800 kt
4. Further Fabrication / Component Manufacturing Machining, stamping, welding, surface treatment, assembly Nemak, Bocar, Tier-1 auto suppliers; architectural systems firms Not separately reported
5. End-Use Industries Vehicle production, building systems, beverage cans, appliances, electrical Stellantis, GM, VW, Tesla (under construction); Grupo Bimbo; FEMSA Apparent consumption ≈1.9 Mt

*Source aggregation from WEDC, Alcircle, IAI statistics, company releases.

Stage-by-Stage Narrative

  1. Importation of Primary Aluminium & Scrap
    • Mexico imported ~1.4 Mt of primary aluminium ingot/billet in 2023, chiefly from Canada, the US, Russia and the Persian Gulf.
    • Scrap imports—largely zorba shreddings, used beverage cans (UBCs), and automotive scrap—added ~1.3 Mt. Prevailing prices benchmark against the LME plus Midwest Premium, adjusted for local freight and tariff regimes.

  2. Secondary Aluminium Production (Recycling)
    • Highly efficient domestic collection systems push Mexico’s UBC recycling rate above 95 %.
    • Rotary, reverberatory and tilting furnaces convert scrap into alloys 319, 356, 380, ADC12 and proprietary blends.
    • Molten-metal sales (e.g., ARZYZ “just-in-time melt”) reduce re-melt energy by up to 15 %, binding recyclers to nearby die casters.

  3. Semi-Fabrication
    • Extrusions: >40 presses nationwide; profiles feed architectural, solar-frame and industrial markets.
    • Flat-rolled: Almexa and Novelis supply sheet, plate, and foil; Novelis’ San Luis Potosí expansion will lift recycling + rolling capacity to 400 kt/y.
    • Die casting: Mexico hosts >30 high-pressure die-casting plants focused on powertrain and E-mobility housings.

  4. Further Fabrication / Manufacturing
    • Automotive suppliers machine, assemble, and test complex castings (battery housings, e-motor cases).
    • Building-product manufacturers fabricate window, door, curtain-wall and façade systems from domestic extrusions.
    • Packaging firms convert coil into >22 billion aluminium cans annually; projected metal demand 450 kt by 2025.

  5. End-Use Industries
    • Automotive dominates (>45 % of domestic Al demand). Aluminium content in Mexican-assembled vehicles should climb from 140 kg (2020) to 180 kg by 2027.
    • Construction (~25 %) rides housing and commercial build-outs in urban corridors.
    • Food & beverage (~18 %) leverages aluminium’s barrier properties and recyclability narrative.

Players Analysis

Key Secondary Producers

• ARZYZ, S.A. de C.V. – Three smelting complexes; output ~350 kt; offers ingot, cone, molten delivery. Pursues ASI certification and hydrogen-ready furnaces.
• AMISSA – Rotary furnace specialist; 120 kt capacity; Industry 4.0 scrap tracking; supplies OEM-grade alloys 380/383.
• REAL ALLOY – Multinational recycler; two Mexican plants integrate dross recovery, RSI production; focuses on closed-loop contracts with auto makers.

Principal Semi-Fabricators

• Nemak – 36 plants worldwide, 10 in Mexico; processes ~600 kt aluminium per year into engine blocks, EV battery housings; Tier-1 to GM, Ford, BMW.
• Cuprum – 16 extrusion presses, ladder and architectural system leader; vertical integration from billet to anodised/painted profiles.
• Bocar Group – High-pressure die casting and machining; Guanajuato & Querétaro campuses serve Audi, VW, Stellantis.

Representative Import/Trading Houses

• Trafigura – Handles LME-grade ingot for Mexican customers; maintains bonded warehouses at Altamira and Manzanillo.
• Glencore Metals & Minerals – Supplies sow and T-bar; offers hedging services pegged to CME Aluminium Duty-Paid contract.

End-Use Giants (Demand Drivers)

• Stellantis Monterrey – First OEM in Mexico to pour in-house structural castings (imports billet, recycles machining chips on-site).
• Tesla Gigafactory (under construction, Nuevo León) – Expected consumption: 65 kt aluminium/year at full build-out.
• Grupo Bimbo & FEMSA – Anchor customers for can-sheet and foil; drive closed-loop UBC collection programmes.

Market Concentration Snapshot

Approximate shares of domestic aluminium consumption, 2023:
Automotive 45 % | Construction 25 % | Packaging 18 % | Electrical & others 12 %.
The top five recyclers account for ~60 % of secondary production; die-casting capacity is more fragmented, with the five largest companies controlling ~45 % of installed tonnage.

Commercial Relationships

• Import Contracts – 3- to 12-month LME-linked contracts dominate; premiums renegotiated quarterly to reflect logistics and tariff moves.
• Scrap Sourcing – Recyclers operate dual channels: (a) domestic network of aggregators paid LME-based “scrap minus” formulas; (b) spot cargoes from US yards for zorba/taint-tabor grades.
• Molten Metal Supply Agreements – Recyclers and proximate die casters establish long-term offtake contracts; price reflects alloy, energy pass-through, and scrap index.
• Tiered Automotive Supply – Tier-1s (Nemak, Bocar) sign platform-life agreements (5–7 years) with OEMs; quality clauses governed by IATF 16949; penalties for ppm defect breaches.
• Construction Channel – Extruders sell via distributors to installers; credit terms 30–60 days; aluminium price escalators embedded in contracts with large developers.
• Packaging Loop – Can-sheet producer → Can maker → Beverage filler → Consumer → UBC collector → Recycler → Can-sheet producer: a closed technical loop with contracts that ensure scrap buy-back at pre-agreed discounts to prime.

Bottlenecks and Challenges

  1. Import Dependence – 100 % of primary aluminium and 40 % of scrap are imported; exposes the chain to LME volatility, freight spikes, and geopolitical risk.
  2. Tariff Whiplash – 2024 duties (then partial rescission) on certain aluminium products inflated premiums by up to US $180 / t and disrupted supply planning.
  3. Scrap Quality & Quantity – Growing demand outpaces collection infrastructure; contamination (paints, attachments) raises melt loss and dross.
  4. Logistics Strain – Congested ports (Manzanillo, Veracruz) and limited rail wagons lengthen lead-times; container shortages elevate export costs.
  5. Technology Gap – SMEs lack capital for advanced low-pressure die casting, vacuum furnaces, and real-time X-ray inspection, limiting move into aerospace grade work.
  6. Environmental Compliance – New NOM-185 emissions standard will require secondary smelters to retrofit bag-houses and regenerative burners, adding 3–5 % to operating cost.
  7. Data Transparency – Sparse official statistics impede forecasting; firms rely on trade-house intelligence, leading to asymmetric information across the chain.

Value Chain Relationships and Business Models

Relationship Product / Service Exchanged Dominant Business Model Bottlenecks & Pain Points
International Producers ↔ Mexican Importers Ingot, billet, sow; scrap Commodity trading (spot & term) Tariff uncertainty; dollar-peso FX swings
Scrap Generators ↔ Recyclers Post-consumer & industrial scrap Aggregation + processing margin Collection inefficiencies; contamination
Recyclers ↔ Die Casters / Extruders Recycled ingot, billet, molten metal Conversion-spread model; molten JIT partnerships Volatile scrap spreads; energy cost pass-through
Semi-Fabricators ↔ Component Makers Profiles, sheet, castings Make-to-order, tooling amortisation Quality certification costs; lead-time rigidity
Component Makers ↔ OEMs / Builders / Fillers Machined parts, façade systems, cans Tiered supply; contract manufacturing Just-in-time logistics; price escalation clauses
End-Users ↔ Consumers Vehicles, buildings, packaged goods B2C & B2B sales Demand cyclicality; sustainability branding

Strategically, firms capture value by:
• vertical integration (e.g., Nemak melting internal scrap),
• offering service-embedded products (ARZYZ molten delivery),
• leveraging location to minimise transport (border-state clusters), and
• marketing low-carbon credentials to OEMs seeking scope-3 emission cuts.

Conclusion

Mexico’s aluminium sector demonstrates how a country with negligible primary production can nonetheless build a sizeable, sophisticated downstream industry. Strengths lie in:
• world-class recycling efficiency;
• dense automotive and construction demand clusters; and
• geographic proximity to the United States.

Yet the system is structurally exposed to external shocks—be they tariff shifts, freight disruptions, or scrap shortages. Addressing these vulnerabilities will require:
1. Deepening domestic scrap collection and upgrading sorting technologies.
2. Investing in port, rail, and intermodal infrastructure to streamline imports and exports.
3. Accelerating technological diffusion—particularly advanced casting and inline quality monitoring—to move up the value curve into aerospace and EV applications.
4. Enhancing policy stability and data transparency to support long-term contracting and investment.

Further research should quantify carbon footprints per value-chain segment and appraise the economic viability of limited primary smelting using low-carbon energy in northern Mexico.

References

• AMISSA | Aluminum smelting and smart recycling – https://amissamx.com/
• ARZYZ, S.A. DE C.V. | Aluminium Stewardship Initiative – https://aluminiumstewardship.org/about-asi/members/arzyz-s-a-de-c-v/
• Aluminum recycling: an urgent and unexplored reality in Mexico | TOMRA – https://www.tomra.com/en/news/2021/mexico-aluminium-recycling
• Aluminum Extrusion Industry Faces Challenges Amid Global Supply Chain Disruptions – https://aluplast.net/en/news/aluminum-extrusion-industry-faces-challenges-amid-global-supply-chain-disruptions
• Increasing container costs and tight scrap availability concerns for aluminium industry – https://www.metalbulletin.com/Article/3186704/Increasing-container-costs-and-tight-scrap-availability-concerns-for-aluminium-industry
• Lince – Aluminum & Alloys – https://lincealuminum.com/
• Mexico Automotive Parts Aluminum Die Casting Market Report | Mordor Intelligence – https://www.mordorintelligence.com/industry-reports/mexico-automotive-parts-aluminum-die-casting-market
• Mexico relies on imported aluminum – Wisconsin Economic Development Corporation – https://wedc.org/blog/mexico-relies-on-imported-aluminum/
• Mexico Aluminium Market Report Forecast Till 2030 – https://www.alcircle.com/market-report/mexico-aluminium-market-report-forecast-till-2030-1250
• Mexican tariffs said to already be affecting aluminium supply chain and premiums – https://www.metalbulletin.com/Article/3178462/mexican-tariffs-said-to-already-be-affecting-aluminium-supply-chain-and-premiums
• Novelis to Expand Recycling Operations in Mexico (company release, 2023) – https://www.novelis.com/newsroom/novelis-expands-recycling-mexico
• Real Alloy – The Real Standard for Recycled Aluminum – https://www.realalloy.com/
• Top 10 Aluminium Die Casting Manufacturers in Mexico – https://www.sunrise-metal.com/top-10-aluminium-die-casting-manufacturers-mexico/
• Trafigura Annual Report 2024 – Metals and Minerals section – https://www.trafigura.com/annual-report-2024/
• Understanding Aluminium Premiums in Mexico: Market Trends 2025 – https://www.discoveryalert.com/blog/understanding-aluminium-premiums-in-mexico-market-trends-2025