Steelmaker Ternium expects to benefit from continued strong manufacturing demand in Mexico and the US, CEO Daniel Novegil said in a Q3 earnings call.
The Luxembourg-based company reported a 15% year-on-year increase in net sales to US$1.219bn from its Mexican operations, which was attributed to higher prices and a 9% rise in shipments to 1.38Mt.
The results were boosted by increased market share in Mexico, where Ternium products have largely replaced imports, as well as higher demand for shipments to the US. The outlook remains positive in Mexico, with Ternium expecting slightly higher shipments in the seasonally weak Q4.
Among the sectors spurring higher demand in Mexico are energy and automotive, Novegil said. Ternium is positioned to benefit from higher automotive sales with the ongoing ramp-up of its Tenigal galvanized steel plant in Pesquería, Nuevo León state, a 51:49 JV with Japan's Nippon Steel.
While demand in the construction sector is lagging behind that of manufacturing, the industry has very good prospects over the medium to long-term due to population growth, the CEO said.
"Overall, [demand in Mexico] is going very well, the market is strong and healthy and I feel we have good prospects going forward," he added.
SOUTHERN BUSINESS
Ternium's Argentine operations saw a 12% decline in Q3 net sales to US$671mn. Through the first nine months of the year, revenue dropped 6% and shipments slid 5% from 2013 record demand, Novegil said.
The company saw stable demand in Argentina's construction and industrial sectors.
STEEL PRICES
Steel prices will remain stable or decline slightly from current levels during the remainder of the year, Novegil said, citing factors such as falling raw material costs, low energy costs and global demand.
The company expects to spend US$500mn in capex in 2015, the CEO added, with total shipments expected to reach 10Mt in the year, up from 9Mt-10Mt in 2014.
Source: Business News Americas
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