Ternium sees earnings soar in Q4, expects increasing Mexican steel demand

Latin American steelmaker Ternium posted a strong uptick in earnings in its fourth quarter, and sees increasing steel demand growth in Mexico.

Ternium reported net income of $554 million in Q4’23 on Tuesday, up a whopping 839% over the same period last year on sales that increased 39.1% to $4.93 billion.  

The steelmaker cited, among other things, strong steel shipments in Mexico “in a seasonally weaker period, aided by continued growth of commercial customer demand.”

“Ternium’s shipments in the country grew by 22% during the year, representing a significant market share gain supported by the ramp-up of its new hot rolling mill in Pesquería,” the company said in a statement.

Steel shipments totaled 8.36 million metric tons (mt) for Mexico in 2023, up from 6.84 million mt in 2022. Meanwhile, Ternium’s Mexican steel shipments totaled 2.12 million mt in Q4’23, down 1% from the previous quarter.

Pesquería updates and outlook

Ternium said it expects to begin deploying its downstream project in Pesquería during the second half of 2024, with the startup of a 550,000-mt-per-year new pickling mill and the first lines in its new service center.

“This should support an increase in volumes in this market during the second half of this year,” Ternium said.

Ternium announced in June 2023 its plans to build a $3.2-billion EAF slab mill in Pesquería, adjacent to the $1-billion downstream facility currently under construction there.

The company commented that “healthy industrial activity in Mexico,” along with the nearshoring of manufacturing trend, “are contributing to steel demand growth in the region.”

“On the other hand, apparent steel demand in the domestic commercial market is showing short-term weakness due to a destocking tied to the recent downturn in steel spot prices in North America,” Ternium said.

Usiminas

In Brazil, Ternium said it began fully consolidating Usiminas results in July 2023, a period in which Usiminas “successfully relined its main blast furnace.”

Ternium, along with Luxembourg-headquartered Tenaris, had announced their increased stake in Brazilian steelmaker Usinas Siderúrgicas de Minas Gerais S.A. (Usiminas) last July.

“In 2024, Usiminas will be focused on increasing its industrial system productivity,” Ternium said.

The company added that for Usiminas in Q1 it “anticipates a sequential improvement in the profitability of its steel segment.”

However, Ternium also anticipates “a revenue decline in its (Usiminas’) mining segment due to the temporary halt of one of its ore processing plants and seasonal rains at the beginning of the year.”