Steel Mills

Ternium Reports Strong Q4, Record Full-Year Performance

February 15, 2022

Ternium reported net earnings of $1.136 billion in the fourth quarter 2021, down from $1.366 billion in the prior quarter, but a 31.4% boost from $865 million in the fourth quarter of 2020.

The steelmaker achieved record profitability for the full year ended Dec. 31, 2021, with earnings totaling $4.367 billion, more than a five-fold gain over 2020’s $867 million.

The gains resulted from higher steel prices and strong global demand, the company said. Though shipments declined 8% sequentially in the fourth quarter to 2.83 million tons versus 3.07 million in Q3, for the full year they outpaced 2020’s mark by 6%. Shipments in 2021 totaled 12.07 million tons compared to 11.36 million the year prior.

Net sales were $4.33 billion for the quarter, up 68% versus $2.58 billion during the same year-ago period. Full-year sales were $16.09 billion, nearly doubling the prior year’s $8.74 billion in sales. 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, as Ternium’s slab facility in Brazil is shipping more slab to the company’s downstream facilities, including its new hot strip mill in Mexico.

Ternium also successfully completed its capacity expansion program and expects an ongoing ramp-up of the new hot-rolling mill in its Pesquería facility.

Earnings were offset by higher costs per ton compared to the third quarter, primarily due to higher raw material and slab costs flowing through inventories, but also due to supply-chain disruptions in manufacturing industries, mainly the ongoing semiconductor scarcity, the company said in outlook commentary released with earnings data on Tuesday, Feb. 15. The situation is expected to gradually adjust and drive increased apparent steel demand and decreased steel imports.

Ternium anticipates declining steel prices to normalize during the first half of 2022, and expects sequential earnings to dip in Q1 2022 because of lower margins partially offset by higher shipments in North America.

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 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.