Steel Mills

Ternium Q3 Profits Surge on Higher Prices

November 2, 2021

Ternium reported net earnings of $1.37 billion in the third quarter of 2021, up from $1.16 billion in the the prior quarter and following a loss of $21 million in the third quarter of 2020. The gains resulted from higher steel prices and strong global demand. Shipments were 3.1 million tons in the third quarter, largely unchanged from the second quarter.

Net sales were $4.6 billion, up 115% versus $2.2 billion during the same year-ago period. The sequential and year-over-year improvements in the third quarter of 2021 were mainly the result of higher realized steel prices, partially offset by higher costs of raw materials and purchased slabs.

Shipment gains year-over-year were partially offset by lower slab volumes shipped to third parties. That trend came because Ternium’s slab facility in Brazil is shipping more slab to the company’s downstream facilities, including its new hot strip mill in Mexico.

The exceptional results were achieved despite a slower-than-expected ramp-up of the company’s new hot-rolling mill in Pesquería, Mexico, due to “energy-related bottlenecks.”

Higher costs per ton are expected in the fourth quarter compared to the third quarter, primarily due to higher raw material and slab costs flowing through inventories, the company said in outlook commentary released with earnings data on Tuesday, Nov. 2. This increase in costs should be partially offset by higher revenue per ton – which is expected to be driven by higher quarterly contract prices.

Ternium anticipates steady steel demand and a gradual normalization of global supply chains moving forward. Looking ahead, a more balanced steel environment is expected in 2022.

Ternium is a leading Latin American flat steel producer with operations in Mexico, Brazil, Argentina, Colombia, the southern United States and Central America. It offers a broad range of high value-added steel products for the automotive, appliance, HVAC, construction, and other manufacturing sectors.

By David Schollaert, David@SteelMarketUpdate.com

David Schollaert

David Schollaert is a senior analyst for Steel Market Update. David joined SMU after more than a decade in the metals and mining industry in a myriad of different roles. Much of his early experience and expertise were within the coverage and analysis of steel-making raw materials and served previously as senior editor of the CRU Prices Service. Most recently, however, before his return to market analysis, David held roles as a metals buyer and an operations manager for raw material suppliers. Based in CRU’s Pittsburgh office, David can be reached at david@steelmarketupdate.com or 724-720-1008.