Trading Market Insights: January 2025

In December, Brazil’s interest rates increased, while Mexico’s decreased, continuing its easing cycle as expected. Inflation in Brazil remained stable, while Mexico eased for the second month. Manufacturing PMI fell in Brazil and remained stable in Mexico.

The Leeco Trading team is carefully monitoring international trading market developments, particularly within the Latin American region. Here are some of the biggest headlines we are watching.

Brazil’s Economic Activity

In November, Brazil’s economic activity exceeded market forecasts, continuing a trend of stronger-than-expected results, despite the central bank’s ongoing monetary tightening cycle. The IBC-Br index, a leading indicator of gross domestic product (GDP), experienced a 0.1% increase in seasonally adjusted figures compared to October.

Chile to Lift Copper Output 6%

Chile, the world’s number one copper producer, will boost its output of the red metal to 5.54 million metric tons in 2034, representing a 5.6% increase from 2023. The Latin American nation produced 23.6% of the world’s copper in 2024. That amount is expected to increase, with Chile’s hold over the industry representing a 27.3% share by 2034.

Mexico Economy Growth Outlook

Economists predict Mexico’s economy will remain sluggish this year due to potential radical shifts in U.S. tariff and migration policies. Private spending and investment, already weakened by high uncertainty and elevated interest rates, may receive some support from measures aimed at low-wage earners and specific industrial sectors. A significant concern is President Donald Trump’s proposal to impose 25% tariffs on goods crossing the border, which could strain Mexico’s economic situation.

Brazil’s Trade Surplus Shrinks

Brazil’s trade surplus shrank by nearly 25% in 2024 compared to the previous year, to $74.6 billion, driven by higher imports as Latin America’s largest economy outpaced initial growth expectations. The annual result followed a $4.8 billion surplus in December, which exceeded a $3.9 billion forecast. Despite the 24.6% drop from 2023, the 2024 trade surplus was the second largest since records began in 1989, trailing only the $98.9 billion surplus achieved the previous year. Exports remained largely flat, falling 0.8% from 2023 to $337 billion, impacted by lower prices and volumes for key Brazilian commodities such as soybeans and corn, with iron ore also experiencing a year-over-year decline due to price factors.

This information is an excerpt from Leeco Trading’s January 2025 Trading Market Report newsletter.

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