Ternium to build sizable EAF mill in Mexico

The board of directors of Luxembourg-based steelmaker Ternium SA says it has approved the construction of a 2.6-million-ton-per-year electric arc furnace (EAF) steel slab production facility in Mexico.

The large capacity melt shop seems likely to be located at or near Ternium’s Pesquería industrial center facility in Neuvo León in northern Mexico. Ternium says the EAF mill “will complement and support” its new hot rolling mill, which began operations at Pesquería in mid-2021.

The steelmaker says direct reduced iron (DRI) will have the potential to play a large role in supplying metallics to the EAF mill. While the EAFs will be able to produce up to 2.6 million tons per year, an accompanying DRI “module” will have an annual capacity of 2.1 million tons, Ternium says.

The company says it expects to commission these facilities in the first half of 2026.

“The implementation of the USMCA [United States-Mexico-Canada] trade agreement and recent trends of nearshoring manufacturing capacity in the steel value chain have made the USMCA region an attractive destination for continued investment," Ternium CEO Máximo Vedoy says.

He continues, “Importantly, the new EAF-based steel shop will also accelerate Ternium’s progress toward achieving our previously disclosed 2030 decarbonization target and support our ongoing compliance with the USMCA’s 'melted and poured' requirement. The new DRI module will also include carbon capture capabilities and readiness to switch from natural gas to hydrogen use.”

In its 2021 sustainability report, Ternium says 7 percent of its steelmaking output consisted of scrap-fed EAF technology. Another 30 percent was steel made with DRI fed into an EAF, while the remaining consisted of iron ore-based basic oxygen furnace (BOF) production.

Ternium made the announcement the same time it released its 2022 financial results. For the year, the steelmaker reported adjusted earnings before interest, taxes, depreciation and amortization of $3.4 billion. That is down nearly 42 percent from the more than $5.8 billion it earned in 2021. The company shipped nearly 11.9 million tons of steel last year, down slightly from the 12 million tons shipped in 2021.

In addition to its Neuvo León, Mexico, operations, Ternium has 18 production centers in Argentina, Brazil, Colombia, Guatemala, Mexico and the United States.