Ternium set to complete Mexican steel slab mill by mid-2026

Steelmaker Ternium expects to complete by mid-2026 a new slab steel mill that it is building in Nuevo León state, Mexico.

“The new 2.6 million-ton steel slab mill in Pesquería continues to advance, with completion expected by mid-2026. This project will enhance our capabilities in the USMCA region and position us as a leader in low-emission steelmaking. This is the largest expansion project in our history, and we are thrilled about its progress,” Ternium CEO Maximo Vedoya said during the firm's Q2 earnings call.

In June 2023, the steelmaker reported that the new facility was scheduled to start operations in the first half of 2026.

Last March, Vedoya told BNamericas that the price tag of the new facility had been raised by US$200 million to US$3.4 billion due to the appreciation of the peso against the US dollar. According to company data, the new plant is expected to create 1,800 direct jobs once operations begin.

The CEO gave an update on Ternium's growth projects during the call.

“I am glad to say that we just started up the first line in the downstream project, 550,000 tons split in line and also the first line in our new finishing center in Pesquería. The rest of the finishing lines should be ready by the end of the year, and the coal rolling mill and galvanized lines are on track to be delivered between the end of next year and the beginning of 2026,” Vedoya added. 

The executive also reported that in early July, the company introduced a new galvanized simulator in its R&D center in Mexico that will enable it to shorten certification times and improve the assessment of its product quality.

“With the downstream project in Mexico and our new R&D center, we are adding more value-added products that will enable us to better serve our customers in the automotive, renewable energy, and high compliance industries as well as in the construction and agriculture sectors,” Vedoya said. 

“These new lines are a great opportunity for us to consolidate our position as a leading steel supplier in the region, as we continue to meet the demand for high-end steel products in Mexico, displacing steel imports and benefiting from nearshoring,” he added. 

After the US administration implemented a 25% duty on imports from Mexico of steel produced in the North American region, Mexican President Andrés Manuel López Obrador announced that exports of steel products made with Brazilian steel could be exempted from this duty. 

“This exception is in the process of being formalized,” Vedoya reported.

Regarding the alleged surge in Mexican steel imports from the US market and the need to control transshipments of China steel through Mexico, the executive clarified that this view is mistaken and trade data even indicates the opposite. 

“Steel trade between Mexico and the US is mutually beneficial with a surplus for the US. In 2023, the US exported 4.1 million metric tons of finished steel to Mexico. On the other hand, Mexico exported 2.3 million tons of finished steel to the US. This is 43% less than what the US exported to Mexico,” he said. 

“Looking at these numbers in terms of market share, steel from the US represents 14% of Mexico's market share, while Mexico still represents only 2.5% of the US market share.” 

In Q2, Termium reported a net loss of US$743mn, down from a net profit of US$736mn in 2Q23. Capex in the period amounted to US$409mn as Ternium progressed with its expansion programs in Mexico and a new wind farm in Argentina.

Steel shipments in the second quarter of 2024 increased in Brazil and the Southern Region. However, a slight decrease in sales volumes in Mexico and lower shipments in other markets offset these increases. 

According to Vedoya, the steel market in Mexico remains healthy, operating at good levels after last year's 14% year-on-year increase in apparent steel consumption. 

“The industrial steel market is stable and strong with the auto industry showing healthy steel demand. Automotive production in Mexico in the first half of this year increased 5% year-over-year. The commercial market has been a little more affected by the steel prices downturn during the quarter, which induces at the stocking process”.