Steelmaking group Ternium saw its Mexican division play a major role in its Q2 results.
Ternium said net revenues at the company’s Mexican Region totaled $1.18 billion in Q2, 8 percent up, year-on-year, as opposed to a decline of 29 percent, year-on-year, in the same period at its Southern Region, and a 7 percent decline at its Other Markets Region, totaling $451 million and $222.8 million, respectively.
Combined steel net revenues in the three market regions totaled $1.85 billion, 6 percent down, year-on-year. Sales of other products in the three market regions was $2.5 million, 88 percent down, year-on-year.
Ternium added that steel shipments increased 9 percent year-on-year in Q2 “mainly due to higher shipments in Mexico, partially offset by lower shipments in the Southern Region.”
As for Mexico, Ternium anticipates steel shipments to “decrease in Q3 despite steady end-market demand conditions, mainly as a result of inventory buildup in the Mexican commercial market over the past few months, as well as third quarter seasonality in the automotive and heating, ventilation and air conditioning (HVAC) industries,” following a new steel shipments quarterly record in Mexico in Q2.
Ternium said market conditions in Argentina’s steel market remained weak in Q2.
“Ternium expects some further weakness in shipments to the local domestic market into Q3 of the year. This should be partially offset by higher exports to Argentina’s neighboring countries,” the company noted.
Explaining its $230.2 million capital expenditure in H1 2016, Ternium said the main investments in the period included those made in Mexico “for the upgrade and expansion of a hot strip mill, the expansion of service center processing capacity, the improvement of environmental and safety conditions at certain facilities and the expansion of Peña Colorada’s iron ore processing facilities to compensate for lower grade ore reserves, and, in Argentina, those made at the coking facilities, the hot-rolling mill, the steelmaking facilities and at one cold-rolling mill.”