Latin America-focused steelmaker Ternium is seeing diverging trends for its operations in Argentina and Mexico.
During a presentation with analysts and investors hosted by the steelmaker during the Ternium Investor Day held last week in New York City, the company said apparent steel use in Argentina is expected to decline 9 percent in 2016, year-on-year, to 4.8 million.
Citing data from Alacero, the company added that apparent steel use is projected to rise 6 percent in 2017 to 5.1 million mt. The decline in Argentinian steel use in 2016 is viewed as an adaptation period; as such, steel consumption should “adjust” in 2017.
Ternium said new infrastructure plans are expected to materialize “gradually.” On the other hand, Argentina has also seen a decrease in Brazilian demand for manufactured products.
Ternium said its Argentinian steelmaker Siderar is “adapting to new economic conditions.” With an “operations rebalance,” the company is currently operating one blast furnace, one continuous caster, and coking production, while renegotiating supply and service contracts.
As for the positive trends it sees for Argentina in general, Ternium cited easing of FX restrictions, a return to international credit markets, the normalization of international trade and a better investment environment.
As for Mexico, the prospects seem to be more positive.
Ternium said Mexico has become the largest steel market in Latin America, with the highest per capita apparent steel use in Latin America, which is about 201 kilograms (0.201 mt) per year.
According to Ternium, shipments to the industrial market continued growing in 2015, fueled by the home appliance manufacturers and the automotive industry.
Ternium’s shipments for the industrial customers in Mexico are expected to reach 3.2 million mt in 2016, up from 2.9 million mt in 2015.
Ternium said Tenigal’s current line is “fully devoted to automotive products, following a demanding certification process,” adding that it has “other expansions under analysis,” including a new galvanizing and painting line for industrial customers and a new service center for the automotive industry.