Ternium’s Mexican steel sales decline in Q2

Thursday, 06 August 2015 01:04:11 (GMT+3)   |  
       

Ternium’s steel segment sales in Mexico declined 10 percent in Q2, year-on-year, to $1 billion, the company said this week. Net sales of steel in the Southern region, which includes the steel markets of Argentina, Bolivia, Chile, Paraguay and Uruguay, reached $637.4 million in Q2, 4 percent down, year-on-year.

In Q2, shipments in Mexico declined 5 percent, quarter-on-quarter, to 1.5 million mt, but rose 3 percent in the year-on-year comparison, a company executive said, while commenting the company’s Q2, H1 results in a conference call.

“After record high shipments in Mexico in the first quarter of the year, the second quarter shows a decrease in connection with stocking trend in the value chain, something that we commented would happen in our last latest conference call,” said Pablo Brizzio, CFO at Ternium.

Looking ahead, the company said shipments in Mexico will remain “relatively stable” in the Q3 on a “sequential basis,” but will increase compared to Q3 2014.

“The Mexican steel sector continues to show a healthy growth driven by demand from abroad for the export of its manufactured products, especially to the US markets,” the executive explained.

In terms of steel prices, Ternium expects to realize “sequentially lower steel prices in Mexico in the third quarter 2015 due to the effect on the revenue line of the gradual pass-through of lower steel prices in connection with the regular price reset of industrial customer sales contracts.”

As for Q3, Ternium expects operating income to be “roughly in line with operating income in Q2, as shipments will remain relatively stable in Mexico and Argentina and the anticipated decrease in revenue per ton in Mexico should be offset by the ongoing decrease in cost per ton during the Q3.” In Q2, steel revenue per mt in Mexico declined 7 percent, quarter-on-quarter, to $54/mt.
 


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