Ternium posts solid Q2, expects further shipment growth

Latin American steel producer Ternium delivered a solid performance in the second quarter of 2025, according to earnings results released this week. Performance was driven primarily by higher realized steel prices in Mexico, even as shipment volumes declined slightly across its regional portfolio.

Q2’25 net income for the Luxembourg-based company climbed to $259 million, with adjusted net income reaching $299 million, up 59% from the previous quarter. Executives attributed the earnings growth to deferred tax gains and stronger operating margins, which offset exchange-rate-related financial headwinds, particularly from the appreciation of the Brazilian real against the dollar.

Sales for the quarter slipped 13%, as steel shipments of 3.72 million tons were off 3% from a year earlier.

“Despite macroeconomic pressures, we’ve demonstrated that regional strength and pricing power can support resilient performance,” said CEO Maximo Vedoya during an earnings conference call.

Vedoya said the business environment in Mexico is currently marked by caution, pending clearer information regarding US trade policy and tariff negotiations. However, the Mexican government has taken some measures to defend against unfair imports and increase domestic steel production.

“This supports our expectations of higher sequential shipments in Mexico in the third quarter,” Vedoya noted.

Mining segment under pressure

Ternium’s mining business posted sequential gains in volume, with shipments rising on the back of stronger iron ore production. However, margins declined due to lower realized prices. Cash operating income fell to $52 million in Q2’25, with operating margins slipping to 20%.

Expansion update

Capital expenditures reached $581 million in the first half of 2025, driven by ongoing investment in Ternium’s Pesqueria industrial center.

The project includes a direct-reduced iron (DRI) module and an electric-arc furnace facility with annual capacity of 2.6 million tons.

Executives mentioned that installation of key equipment will take place throughout the remainder of this year, with testing and ramp-up expected to begin in early 2026.

A galvanizing line and new cold rolling mill are scheduled to start at the end of this year, providing 1.5 million tons of new annual capacity to the Mexican market. Vedoya reminded analysts that the equipment has a very long ramp-up period, so massive production increases won’t be seen for some time.