Ternium Q2 profit jumps on stronger Mexico demand

Ternium reported higher sales, profit, and shipments in the second quarter. Mexico remains the company’s strongest market even as US trade measures add uncertainty across North America.

Net sales rose 10% year over year to $4.34 billion. Net income jumped from $259 million last year to $465 million in Q2’26.

Shipments reached 3.86 million tons, a 4% gain from last year. Mexico accounted for 54% of volumes, Brazil 24%, the Southern Region 13%, and Other Markets 8%, including 2% to the U.S.

Ternium’s steel segment posted higher sales both sequentially and year over year, driven by increased shipments and higher revenue per ton.

Sequentially, volumes rose in Mexico and in the Southern Region, while prices strengthened mainly in Mexico and Brazil. Year over year, Mexico’s growth offset declines in all other markets.

Shipments in Other Markets were stable sequentially but fell 18% from last year, mainly due to weaker US demand.

Mexico

Mexico remained the Luxembourg-based Latin American steelmaker’s strongest market. Inventories normalized, and authorities tightened measures against alleged unfairly traded imports. Ternium said commercial market demand posted significant year-over-year growth, while industrial shipments were stable sequentially but still below 2025 levels.

Management expects Mexican steel demand to grow about 4% this year, in line with the World Steel Association’s forecast. But they noted that overall consumption remains well below 2023 levels.

Shipments are rising mainly because Ternium is gaining share against imports. Executives on an earnings call said the gap between US and Mexican HRC prices should narrow once US-Mexico talks on USMCA and trade enforcement advance.

The executives said US tariffs and the start of the USMCA review have added uncertainty. “These tariffs are hard to justify in the case of steel,” CEO Máximo Vedoya said. He also noted that US actions have reduced the competitiveness of some Mexican exports. The company also said it “cannot predict their ultimate evolution or quantify their potential impact.”

Management said customers in Mexico are waiting for clarity on Section 232 and USMCA. “Most of the customers think that there is going to be a solution or an agreement,” Vedoya said. Commercial customers are focused on demand recovery, he added.

Infrastructure activity in Mexico is picking up. Ternium said it is supplying steel for new gas pipeline projects and replacing Asian imports at several OEMs. The company and the Mexican administration are discussing projects totaling 600,000-700,000 tons, though they stressed these volumes will materialize over one to two years.

Pesquería update

Construction of Ternium’s new 2.6-million-tons-per-year (tpy) steel shop at its Pesquería complex in northeast Mexico is on schedule, the company said. Terium had previously said the steel shop and 2.1-million-tpy DRI module were scheduled to begin ramping up late this year and into early next year.

Regarding the slab mill, management said startup will begin in early 2027. But ramp-up and customer qualifications will take several quarters. “Don’t expect in 2027 a huge impact,” Vedoya said. He noted strong interest from automotive customers but long qualification times.

Outlook

Supported by higher shipments and improved margins, Ternium expects adjusted EBITDA to rise in the third quarter. Revenue per ton should also increase, but higher costs will partly offset it.

In Mexico, shipments are expected to continue recovering as commercial demand remains strong. New pipeline projects, substitution of Asian imports at OEMs, and public infrastructure work should add volume, the company said.