Trade shifts set stage for higher Ternium shipments in 2026

Ternium SA closed 2025 under pressure from lower steel prices and softer shipments. But the Latin American steelmaker expects both volumes and margins to improve early in 2026 as Mexico’s trade defenses tighten and US tariff uncertainty begins to settle.

Executives on an earnings conference call on Wednesday highlighted the Luxembourg-based company’s cost-reduction program and efficiency gains. They said these helped stabilize results in a year with volatile demand and shifting trade rules across the region.

Results

Operationally, Ternium reported net income of $171 million in the fourth quarter, on sales of $3.8 billion, which were 2.6% lower year over year (y/y).

Shipments in Mexico posted a modest sequential increase in the fourth quarter but remained lower y/y due to weak construction activity and softer industrial demand.

US shipments declined both sequentially and annually, while Brazil saw a small seasonal drop in the fourth quarter and flat volumes for the full year as domestic demand was offset by a surge in flat-rolled imports. Argentina was the bright spot, with shipments rising from a depressed 2024 base.

For the year, Ternium reported $15.6 billion in sales, down 11.6% y/y, while net income jumped 74% to $303 million. Total steel shipments of 15,060,000 tons were down 4% from 2024.

Mexico

Mexico, Ternium’s main market, remained the company’s most significant demand challenge. Apparent steel consumption in the country fell 10% in 2025, with flat-rolled demand down 14%. CEO Maximo Vedoya described the steep contraction as unprecedented in the Mexican market. “I’ve never seen something like that in Mexico to be honest,” he said on the conference call.

Even in this environment, Ternium managed to gain market share in flat products. Fourth-quarter shipments of 1,887,000 tons were down 4% year over year but up 2% sequentially. For the year, shipments totaled 7,432,000 tons, down 9% from 2024. The company expects shipments to rise in 2026.

The country is benefiting from Mexico’s decision to raise import tariffs on steel from non-FTA countries to 35%, a move already redirecting volumes toward domestic producers, the executives said.

Demand in Mexico’s commercial market is also recovering after a prolonged destocking cycle. Ternium believes local mills will displace part of the roughly 9 million tons of finished steel imported into Mexico each year.

Industry forecasts call for a 4% increase in Mexican steel consumption in 2026. Ternium anticipates above-market shipment growth as new downstream capacity at its Pesqueria complex ramps up.

At Pesqueria, Ternium has started production on the cold-rolling mill, galvanizing line, pickling line, and finishing line, completing the downstream expansion at the site, said Vedoya. The cold-rolling mill and galvanizing line are in the ramp-up phase, he noted. Construction of the slab facility is moving ahead as planned, with start-up expected by the end of the year, he added.

US

Shipments in the US declined in 2025. This reflected weaker industrial activity and ongoing uncertainty surrounding US-Mexico tariff negotiations, according to the company.

Ternium’s shipments to “other markets,” which include the US, reached 307,000 tons in Q4’25, down 14% from the previous quarter and 8% from the same quarter a year earlier. Shipments for the year slipped 10% y/y to 1,506,000 tons.

The unresolved USMCA joint review remains a major variable for Ternium. The company is planning under the assumption that renewal may slip into 2027. Executives cautioned that Section 232 frictions could persist until a new agreement is reached. Vedoya stressed that a renewed USMCA must avoid internal restrictions on regional steel trade. He argued that deeper North American integration depends on removing barriers rather than reinforcing them.

Trade

2025 brought a wave of trade actions that reshaped trade flows.

Mexico raised tariffs on more than 1,400 tariff lines and opened new anti-dumping investigations, including one targeting cold-rolled imports from the US, China, and Malaysia.

While discussing the CR trade case, Vedoya said, “We will continue presenting dumping cases if we see that they’re worth pursuing. In this case, we think it is.”

Meanwhile, the US implemented broad measures to counter unfair trade from China and other Asian exporters. At the same time, Brazil imposed AD duties on cold-rolled and galvanized steel and raised import taxes on nine additional products.

Vedoya described Brazil’s shift as an important step toward aligning with the US, Europe, and Mexico in confronting China’s excess steel capacity.

Argentina also moved to strengthen its defenses by signing a new trade cooperation agreement with the US, aimed at addressing unfair imports.

Outlook

Looking ahead, Ternium expects higher adjusted EBITDA and stronger shipments in the first quarter of 2026, driven primarily by Mexico.

The company anticipates higher revenue per ton in both Mexico and Brazil, supported by improving demand and the impact of recent trade measures. Although costs per ton are expected to rise, management still projects margin expansion as efficiency gains continue to take hold.