Ternium Challenged by Pandemic and Low Steel Pricing

“The second quarter has been one of the most challenging quarters I can remember,” said Ternium CEO Máximo Vedoya. Steel demand fell in the second quarter with steel companies in many regions shutting down blast furnaces. Ternium operations in Brazil and Argentina were able to keep operating, albeit at reduced volumes, and increased shipments to other Ternium facilities in the region. Net income for Ternium was $44 million with EBITDA declining only slightly from the first quarter.

Mexican shipments fell 29 percent sequentially in the second quarter due to market disruptions and shutdowns related to COVID-19. With pandemic restrictions easing in the country, manufacturing is making a gradual return. Auto, home appliances, lighting and electrical motors are running at full or near pre-COVID-19 capacity. Net sales for the Mexico division fell 3 8 percent to $851.5 million with shipments totaling 1.17 million tons. Average revenue per metric ton fell 17 percent year-over-year to $725. Shipments are expected to improve in the third quarter as Ternium’s Mexican production facilities return to normal production rates.