Ternium pushes forward with growth projects despite slump in earnings and Mexican market

While navigating trade uncertainty and tough global markets, Ternium is ramping up the largest project in its history. Still, the steelmaker’s leader remains confident in the strength and regional integration of the North American market.

CEO Maximo Vedoya and other executives from the Luxembourg-based steelmaker hosted a conference call with analysts on Wednesday to discuss its fourth-quarter and full-year 2024 results.

All told, Ternium’s Q4’24 sales tumbled 21% year over year (y/y) to almost $3.9 billion while net income dropped 40% to $333 million.

The Mexican steel market, Ternium’s primary market, struggled in late 2024, the company said. Despite volume growth to industrial customers, Q4’24 shipments in Mexico declined 7% from a year earlier due to seasonal trends and weaker commercial demand.

Throughout 2024, Ternium saw a decline in realized steel prices amid lower market prices and demand across all its regions. Recall that it has operations in Mexico, the US, Brazil, Argentina, Colombia, and Guatemala.

For the year, Ternium’s net income plummeted 82% y/y to $174 million despite steady sales of $17.65 billion.

Pesqueria update

Ternium’s capital expenditures reached $1.9 billion in 2024 as construction of the downstream and upstream facilities at its Pesqueria industrial center in northeast Mexico continued.

A new push-pull pickling line and four finishing lines began ramping up operations at the end of the year. The ramp-up curve for these types of projects to reach full capacity is typically 9-12 months, according to Vedoya.

The start-up of the cold rolling mill, initially slated for 2026, has been moved up and is now expected by the end of this year, in tandem with the start-up of the 500,000-ton-per-year hot-dip galvanizing line.

And finally, the $3.2-billion EAF melt shop and reduction unit are still expected to start up in mid-2026.

Despite the near-term challenges in the Mexican market, the company still sees long-term potential, with nearshoring and industrialization continuing to drive demand.

Vedoya remains confident in the impact of the Pesqueria project. “Our expansion in Mexico is crucial for strengthening regional integration,” he stated.

Trade concerns

The recent escalation in US trade measures is a big concern for Ternium. While the company exports little to the US – about 4% of total flat rolled volumes, according to Vedoya – Trump’s tariffs and any retaliatory ones could disrupt regional trade.

“I’m a strong believer in the advantage of the USMCA,” Vedoya commented on the call. “The USMCA has strengthened North America. We trust rational decisions will prevail.”

He added: “We believe that the value chains among these nations will continue to thrive, further deepening commercial integration among the three countries is the way to go, and it will be beneficial for all of them.”

Vedoya does believe the melted-and-poured rules of origin will be strengthened moving forward, so adding the EAF melt shop at Pesqueria is an essential part of Ternium’s growth strategy.