Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

 Steelmaker Ternium expects its steel shipments in Mexico to increase in the second quarter on higher demand from exports for industrial customers, following the commissioning of its new 4.4mn mt hot rolling mill in Mexico in June 2021.


The steelmaker did not disclose the volume expected for Mexico but anticipates achieving a higher Ebitda in the second quarter due to an increase in steel prices and higher costs of iron ore, scrap, and slab, it indicated during its Q1 financial results. Ternium anticipates higher steel prices as well in Q2, as prices in the new United States-Mexico-Canada Agreement (USMCA) market continue to increase and quarterly contract prices reset, with a lag, at higher levels than in Q1.


Total steel shipments increased by 3pc to 3.09mn mt in Q1, from 2.99mn mt in Q1 2020, and its total iron ore shipments rose by 4pc to 1.03mn mt in Q1, from 993,000mt in Q1 2020.


Shipments within Mexico rose by 3pc to 1.69mn mt in Q1, from 1.65mn mt in Q1 2020, totaling more than half of the company’s total shipments. Shipments to South America, including Argentina and Colombia, climbed by 64pc to 623,000mt in Q1, from 380,000mt a year ago. Shipments to other markets, including the US, fell by 20pc to 778,000mt in Q1, from 969,000mt in Q1 2020, it said without disclosing its crude steel production.


In Argentina, Ternium anticipates shipments to remain relatively stable in Q2 compared to Q1 on higher domestic demand from the durable goods and building materials sectors. In Brazil, the company expects shipments to third parties from its slab facility in Rio de Janeiro to fall in Q2 compared to Q1 due to increased integration of this facility with other units in Ternium’s industrial system.


The company’s net income reached $706.7mn in Q1, from a net loss of $19.4mn in Q1 2020. The net sales climbed by 43pc to $3.24bn in Q1, from $2.27bn in Q1 2020. The company’s Ebitda rose by 250pc to $1.05bn in Q1, from $302.1mn in Q1 2020. During the quarter, capital expenditures reached $129.7mn, up from $9.2mn reached in the fourth quarter of 2020, Ternium noted.


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