Steel Mills

Ternium Sees Falling Steel Prices Impacting Q3 Results

Written by Laura Miller

August 2, 2022

As it reported strong second quarter results, Ternium said it expects falling steel prices and high raw materials costs to negatively impact the third quarter.

Ternium logo

The current “significant” declines in steel prices are due to the normalization of the global steel market after Russia’s invasion of Ukraine in February of this year. They are also the result of increasing inflation, monetary tightening in the Western economies, as well as Covid-related lockdowns in China, the Latin American steelmaker said in commentary released with earnings data.

Industrial demand remains healthy in Mexico despite the continuation of supply chain disruptions continuing to suppress automotive demand. Destocking within the commercial market is causing “lackluster demand,” the company noted.

While steel shipments rose sequentially within Mexico and Latin America, Q2 shipments to other markets, which include the US, were down 14%. Total steel shipments to all regions, totaling 2.96 million tons, were down 4% from Q2 2021.

All told, Ternium recorded net income of $936 million in the second quarter, down 19% from $1.16 billion in the second quarter of last year despite sales rising 13% to $4.44 billion over the same period.

Ternium’s new, 4.5-million-ton-per-year hot rolling mill in Pesquería, Mexico, was started up last year, and the company is investing an additional $1 billion to build a pickling line and tandem cold mill with a capacity of 1.5 million tons per year, a 500,000-tpy galvanizing line, and related finishing equipment.

Ternium has previously said that it is considering building a US-Mexico-Canada (USMCA) compliant greenfield EAF facility, with an announcement expected this year or next.

Updates on these projects could be discussed on Ternium’s earnings conference call on Wednesday, August 3.

Ternium has operations in Mexico, Brazil, Argentina, Colombia, Guatemala, and Shreveport, La., in the US.

By Laura Miller, Laura@SteelMarketUpdate.com

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held a variety of positions within the steel industry since 2007, including reporting and editing for Steel Business Briefing/Platts, the Association for Iron and Steel Technology, and Kallanish Commodities, as well as marketing for what was then known as ThyssenKrupp Steel USA (now AM/NS Calvert). After a five-year hiatus working across other industries, she returned to steel in 2021 and has covered the flat rolled, tubular, and trade areas of the industry. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania. She can be reached at laura@steelmarketupdate.com or 724-759-7869.

Read more from Laura Miller

Latest in Steel Mills

USS threatens to cut ‘thousands’ of jobs, move HQ if Nippon sale blocked

U.S. Steel could slash thousands of jobs, shift away from integrated steelmaking, and move its headquarters out of Pittsburgh if its acquisition by Nippon Steel isn’t completed, the company’s top executive said. “We want elected leaders and other key decision makers to recognize the benefits of the deal was well as the unavoidable consequences if the deal fails,” company President and CEO David Burritt said in a statement on Wednesday.