Ternium CEO Máximo Vedoya said the company ended June with $112 million in net debt. Vedoya stated that capital expenditures are expected to decline going forward as the peak of the company’s large-scale investment program in Mexico has passed.
At the company’s expansion project in Pesquería, work is currently focused mainly on the construction of the new slab plant. The facility is scheduled to begin operations in early 2027.
Second-quarter net profit reaches $465 million
Ternium CFO Pablo Brizzio said the company posted a net profit of $465 million in the second quarter, with performance primarily supported by operating results.
The quarterly increase in operating profit was partially offset by weaker financial results due to foreign exchange losses and a decline in deferred tax gains.
Consolidated steel shipments increased by 4% q-o-q in the second quarter. An improvement in Mexico’s commercial market, lower imports and the company’s increased market share supported shipments.
In Brazil, sales volumes remained largely flat as Usiminas focused on margins rather than volume, while shipments in the southern region increased seasonally.
Cash operating profit in the steel segment increased by $240 million compared with the first quarter, supported by higher sales volumes and realized steel prices. Costs per ton, meanwhile, saw a limited increase.
Ternium expects higher EBITDA in the third quarter
Ternium expects adjusted EBITDA to exceed the second-quarter level in the third quarter, supported by higher shipments and an improvement in the EBITDA margin.
Brizzio said revenue per ton is expected to increase, although this positive effect will be partially limited by higher costs per ton in the markets where the company operates.
Ternium’s adjusted EBITDA in the first half of 2026 increased 65% year on year to $1.2 billion. The EBITDA margin also rose from 9% to 14%.
First-half net profit reached $837 million, while earnings per American Depositary Share (ADS) stood at $2.84. As a result, the company’s net profit nearly doubled compared with the same period last year.
Recovery in steel demand in Mexico
Vedoya said measures taken against unfair trade practices in Mexico supported the recovery in steel sales volumes.
He noted that inventory replenishment activities across the commercial distribution chain have brought inventories to more balanced levels, while lower imports and Ternium’s service capabilities also contributed to the company’s increased market share.
The recovery in demand from industrial customers, however, has been slower. The outlook for the automotive sector remains strong, while data center investments are supporting steel demand in the heating, ventilation and air conditioning sector.
At the same time, US Section 232 tariffs continue to affect manufacturing customers in Mexico. This has also led to changes in Ternium’s product mix, while shipments to the commercial market have increased as a share of total sales.
Vedoya said steel consumption in Mexico is expected to increase by around 4% in 2026, following a 10% decline in 2025.
Potential for 600,000-700,000 tons from public projects
Ternium is holding discussions on projects that could generate approximately 600,000-700,000 tons of steel demand under an agreement reached with the Mexican government and the steel industry.
Vedoya said these projects are not expected to generate significant additional demand in a single quarter in the short term, with developments likely to be spread over a one- to two-year period.
US and Mexican officials have also held three rounds of discussions over the past month regarding a new trade framework. A fourth round of talks is planned for early September in Washington.
According to Vedoya, Mexico wants the US to remove Section 232 tariffs, while the Washington administration is asking Mexico to strengthen its measures against unfair trade. Progress on both issues could have positive implications for Ternium and the Mexican steel market.
Pesquería plant to start operations in early 2027
The Pesquería slab plant is expected to strengthen Ternium’s ability to provide locally produced steel, shorter delivery times and technical support to its customers in North America.
The company also expects the steel produced at the facility to have a lower carbon footprint than the blast furnace-based production currently supplying the region’s automotive sector.
However, management warned that the plant’s contribution to Ternium’s financial results in 2027 could initially remain limited. It is expected to take several quarters for production to reach full capacity, while customer certification processes for more than 2.5 million tons of automotive production will also require time.
Vedoya said the company has received demand from customers for the transition to Pesquería production at levels exceeding the plant’s existing capacity.
Ternium also updated its decarbonization target for 2030 in its 2025 sustainability report.
The new target also includes Usiminas, with 2024 set as the base year. The company aims to reduce emissions intensity per ton of hot-rolled steel by 50%.
The target covers Scope 1, Scope 2 and Scope 3 emissions in accordance with the Greenhouse Gas Protocol methodology.
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