Steel Products
Reshoring Helping to Push Ternium's Shipments Higher in Mexico
Written by Laura Miller
April 26, 2023
Mexico is benefiting from the trend of the reshoring of manufacturing as companies work to secure reliable supply chains and be closer to their end markets. As a result, Ternium’s Mexican operations are seeing increasing shipments and market share. Company executives discussed this and other topics on the company’s first-quarter earnings conference call on Wednesday, April 26.
With a technical labor force, shorter lead times, and lower transportation costs to end markets, “Mexico is a beneficiary of this [reshoring] dynamic,” explained Ternium CEO Maximo Vedoya.
The country’s industrial real estate sector has a national occupancy rate of 97%, he noted, and that rate is even higher at 99% if you consider just the northern part of the country. While there was not much of a change in steel consumption within Mexico in Q1 this year vs. last year, said Vedoya, Ternium’s shipments in the country were 500,000 metric tons higher year over year. Additionally, Q1 shipments improved 10% sequentially, reaching an all-time high of 2.1 million metric tons, “reflecting Ternium’s increased market share,” said CFO Pablo Brizzio. The company expects to see sustained or slightly higher shipments in the current quarter and to continue that trend through the remainder of the year. By year’s end, shipments are anticipated to be 20-25% higher than last year. “We are increasing our market share, especially in the automotive industry, as the certification process of new products from the new hot rolling mill in Pesqueria advances,” Vedoya said. The hot rolling mill is currently running at about 88% of capacity and the company is attempting to increase production in the older mill. “So we have some space, but we don’t have a lot of space to increase much more of our shipments,” he noted. “Apparent steel demand in the Mexican market remains healthy,” Vedoya stated, with restocking that began in Q4 of last year not yet showing signs of slowing. The reshoring trend should increase demand further, he said, with some of Ternium’s own customers increasing their capacities and new customers also requiring much more steel. The only potential negative impact could come from the macroeconomic environment with rising interest rates and “a so-called recession in the US,” Vedoya noted. Having spoken of a potential recession for several quarters now, however, customers are now expecting “a softening, but they don’t expect a huge recession,” he said. By Laura Miller, laura@steelmarketupdate.com
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2024/02/SMU_LM_headshot.png.jpg-150x150.png)
Laura Miller
Read more from Laura MillerLatest in Steel Products
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/10/CMC-New-Logo.png)
CMC to open rebar fabrication facility in Ohio
Longs producer and metal recycler CMC plans to open a new rebar fabrication plant in Akron, Ohio.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/steel_trade.png)
US and Mexico take action to curb ‘unfair’ trade
The US and Mexico announced measures on Wednesday to prevent tariff evasion and protect North America’s steel and aluminum industries.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/gears.png)
Final thoughts
First off, we hope everyone had a safe and happy July 4th holiday, with fireworks seen and BBQs attended. Many parts of the country are quite toasty at the moment, signaling that, yes, summer has indeed arrived. And looking at our most recent survey results, the summer doldrums have arrived as well.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/2023/12/Rig_count_pic_3-scaled.jpg)
Active rig counts recover in US, slip in Canada
US drill rig activity moved back up last week after drifting lower for four straight weeks. Meanwhile, Canadian counts slipped for the first time after a seven-week rally, according to the latest data from Baker Hughes.
![](https://www.steelmarketupdate.com/wp-content/uploads/sites/2/images/Featured_News_Icons/AISI.png)
AISI: US steel shipments up in May from April, off from 2023
Domestic steel shipments increased in May month over month but have fallen on-year.