Ternium SA

Bull points

• Ternium delivered strong results in the fourth quarter of this year, 2023, with margins in the period slightly above our last quarter expectations, mainly due to lower costs.
• Looking forward, we anticipate an increase in adjusted EBITDA for the first quarter of 2024, primarily driven by an improvement in our margins, resulting from lower steel costs per ton and slightly higher revenue per ton.
• Ternium shipments in the country for the full year 2023 surged by 22% over the prior year, indicating substantial gain in market share, driven by the ramp up of our new hot rolling mill in Pesqueria.

Bear points

• Usiminas expect stable shipments in the first quarter of 2024, but steel shipments in the southern region decreased by 7% in the fourth quarter, as government imposed restriction on import of inputs affected Ternium steel production rates in Argentina.
• we expect demand in Argentina to decrease compared to the fourth quarter due to the seasonal slowdown and the impact of the macroeconomic reform in our value chain
• However, there is a downside risk to this short-term volume view as steel prices in the region have recently begun a downward trend.