Ternium, a leading steel producer in the Americas, expects to see higher core earnings in Q2 2023 than Q1 due to an anticipated rise in steel shipments and prices.

However, the company’s Q1 profits decreased by 45% to $480 million, as adjusted EBITDA fell by 58% YoY to $508 million. This was caused by a decline in iron ore shipments and steel prices.

Despite predicting lower raw material costs, Ternium warns of uncertainty regarding economic activity in North America in H2 2023, which could impact steel prices.

In Argentina, the company expects stable shipments in Q2, but rampant inflation and an unstable macroeconomic environment may affect demand in H2. Ternium’s largest steel market, Mexico, saw record volumes in Q1, with an increase in demand from the automotive industry.

The company predicts that higher demand from automakers and commercial clients, as well as market share gains, will drive steel volumes in Mexico this quarter.

Ternium did not mention its $2.2 billion steel production plant project in Tuesday’s release, but the company has allocated $197.9 million during the quarter for the development of new expansion projects and improvements at its main facilities.

The new North American trade pact requires at least 70% of steel used in cars to be “melted and poured” in the region.


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