Steel consumption is expected to increase in Brazil, Colombia—and to a lesser degree—the US and Mexico in 2020, as investments in infrastructure projects will boost the latter’s construction industry, Ternium Mexico said without disclosing volumes.
Steel price volatility is also expected to decrease in 2020 amid global and regional trade uncertainties, which have begun to moderate, said the Mexican steelmaker in its latest earnings report.
Ternium expects its steel shipments in Mexico to increase during Q1 2020, as construction activity in the country is showing signs of improvement and the United States-Mexico-Canada (USMCA) trade agreement has been ratified.
In South America, Ternium expects Q1 2020 steel shipments in Argentina to decrease to near Q1 2019 levels because of the country’s recently unstable macroeconomic environment. Steel market conditions for slab production at Ternium’s Brazilian facility have improved, with an increase in seaborne slab prices and a decrease in raw material costs, the company said.
Shipments
In 2019, Ternium steel shipments decreased by 3pc to 12.5mn mt compared to the prior year. Of this amount, 6.3mn mt comprises Mexican steel shipments, which decreased by 3.6pc last year (240,000mt less) compared a prior year.
Mexican steel shipments decreased mainly because of a softer commercial market in 2019, as well as an elevated level of shipments in 2018 in anticipation of rising steel prices.
Shipments in the Southern region fell by 17.3pc (363,000mt) to 1.9mn mt in 2019 from the year prior, mainly due to weaker steel demand in Argentina, Ternium said.
Iron ore shipments declined on an annual basis by 1pc to 3.5mn mt in 2019.
The company’s steel net sales decreased by 11pc to $10.1bn in 2019, compared to the prior year.
Ternium reported an EBITDA of $1.5bn last year, which decreased by 43pc from 2018.
Net income reached $630mn in 2019, compared to $1.6bn achieved in 2018, Ternium said, adding that the $1bn decrease was mainly due to lower operating income, which was partially offset by a lower income tax expense and better financial results.