Ternium S.A. (TX): Business Model Canvas [Dec-2025 Updated]

You're digging into the operational DNA of Ternium S.A. (TX) as we close out 2025, trying to map how they actually make money amidst all that CapEx for the massive Pesquería expansion. Honestly, the story boils down to deep vertical integration and dominating key North and South American markets, which helped them pull in $15.711 billion in Net Sales over the last twelve months ending September 30, 2025. While the Q3 2025 Adjusted EBITDA came in at $420 million, showing margin discipline, the real strategy lies in securing high-value auto contracts via USMCA compliance and controlling costs through proprietary processes. Take a look below at the full Business Model Canvas to see exactly how their key resources, like those iron ore reserves and the new EAF capacity, translate into those solid revenue streams.

Ternium S.A. (TX) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Ternium S.A. maintains to secure supply, drive local development, and advocate for favorable trade conditions. These partnerships are key to managing volatility across the Americas.

Strategic control group participation in Usiminas, a leading Brazilian steel company.

Ternium S.A. consolidates the results of Usiminas for the full year, showing deep operational integration. For instance, in the first quarter of 2025, a $45 million loss was recorded due to an adjustment related to the historical acquisition of a participation in Usiminas. Usiminas Mining (MUSA) holds significant reserves, with reported resources of 2.4 billion tons of iron ore across its three mining sites in the Serra Azul region, Minas Gerais. Usiminas' steel shipments in 2023 showed a heavy reliance on the automotive sector at 34%, followed by Distribution at 29%, Industry at 25%, and Civil Construction at 12%.

Long-term supply contracts with key raw material providers like Vale for iron ore.

Ternium S.A. maintains a relationship with Vale as its main iron ore supplier. This partnership involves joint studies, such as exploring the use of iron ore briquettes at Ternium's Brazil facility using Vale's technology to improve resource efficiency. The importance of this supply chain is reflected in the Mining Segment's performance; in the first quarter of 2025, mining shipments rose sequentially, and Mining net sales increased by 13% sequentially, largely due to higher iron ore realized prices.

ProPymes program to strengthen and integrate small and medium-sized enterprises (SMEs) in the steel value chain.

The ProPymes program, which has been active for nearly 20 years, focuses on building a robust local industrial ecosystem, particularly in Mexico. As of the fifth Ternium ProPymes 2025 Meeting in February 2025, the program highlighted that 89% of Ternium's suppliers are SMEs, which account for 60% of its purchases and 46% of its sales nationwide. The program has driven significant local investment and job creation. Here are the key metrics shared at the February 2025 event:

The program's long-term impact includes a cumulative investment of over $97.5 million since its inception. For context on the program's ongoing activity, figures from 2023 showed:

• SMEs that were part of the program in 2023: 2,169
• Training hours in 2023: 113,615
• Financial support provided in 2023: $5.7 million

These SMEs receive support across several areas to enhance their competitiveness.

Collaboration with associations like Alacero to advocate for fair trade and regional integration.

Ternium S.A. actively engages with industry bodies like Alacero, whose November 2025 Summit focused on trade defense and regional integration. The CEO, Máximo Vedoya, participated in discussions emphasizing the need for fair trade. The urgency for such advocacy is clear from market data presented: Chinese steel imports in the region have risen by 54% over the last three years, now representing 27% of Brazil's total imports, which drives down regional prices. Furthermore, without coordinated action, the OECD projected that global excess capacity could surpass 721 million tons by 2027, threatening vulnerable regional industries. It's defintely critical to align on trade policy.

• Alacero Summit 2025 focus areas: Markets and geopolitics, trade defense, and innovation.
• Ezequiel Tavernelli, who led the ProPymes Program for over 15 years, became Alacero's executive director in June 2024.

Finance: review Q4 2025 capex execution against the $2.5-$2.6 billion full-year target by next Tuesday.

Ternium S.A. (TX) - Canvas Business Model: Key Activities

Ternium S.A. executes its business through a deeply integrated structure, spanning from raw material extraction to final product delivery across the Americas.

Integrated steel production, including mining, iron-making, and finished product manufacturing.

Ternium S.A. maintains significant internal capacity across its value chain as of late 2025.

Executing the $4.0 billion Pesquería expansion project to add 2.6 million tons per year (mtpy) of EAF-based steel.

The Pesquería Industrial Center expansion represents a massive capital commitment aimed at increasing high-value output.

• Total Estimated Capital Expenditure (Capex): $4.0 billion
• New EAF Steel Mill Capacity: 2.6 million metric tons (mt) of slab per year
• Associated DRI Plant Capacity: 2.1 million mt/y
• Investment Invested as of March 2025: $1.4 billion
• Anticipated Steel Slab Mill Start-up: Fourth quarter of 2026
• Project Employment: More than 8,000 workers

Specific line commissioning progress as of late 2025:

Continuous R&D and proprietary process development, like the low-nitrogen steel production.

Ternium S.A. focuses R&D on sustainability and advanced product grades, supported by specific financial allocations.

• R&D Investment (2024 Data): $19 Million
• New Facility Output: High-end exposed steel and advanced high-strength steel grades
• Usiminas R&D Center: Designated as the Largest R&D center in Latin America
• Usiminas Emissions Target: Reduce intensity by 15% compared to a 2019 baseline by 2030

Global procurement of raw materials and energy, focusing on cost efficiency.

Cost efficiency in procurement directly impacts short-term profitability, as seen in recent financial results.

• 3Q25 Cash Operating Income Increase: 10% sequentially
• Driver for 3Q25 Margin Improvement: Decrease in raw material, purchased slab and energy costs, plus efficiency gains
• Argentina Energy Procurement: Investment in a wind farm completed in 2024 supplies 90% of purchased energy requirements in Argentina
• Argentina Wind Farm Investment (2024): $160 million

Ternium S.A. (TX) - Canvas Business Model: Key Resources

You're looking at the core assets Ternium S.A. (TX) relies on to execute its strategy, especially as it pushes forward with major capital projects. Honestly, for a company this size, the physical assets and the cash on hand are what really matter for near-term execution.

The foundation of Ternium S.A. (TX)'s operational strength is its extensive integrated production facilities. As of the latest reports, the company maintains a consolidated finished steel capacity of 15.6 Mtons. This scale across its integrated sites in the Americas is a massive barrier to entry for competitors.

Next, let's talk about raw materials. Ternium S.A. (TX) secures a critical input through its stake in Usiminas Mining (MUSA). This resource base is significant, holding iron ore reserves and resources totaling 2.7 billion tons. That's a long runway for a key commodity, which helps insulate them somewhat from spot market volatility.

The strategic focus on high-end products is physically embodied in the state-of-the-art Pesquería Industrial Center in Mexico. This hub is central to Ternium S.A. (TX)'s plan to replace imports with technologically advanced steel grades for demanding sectors like automotive. The center has been undergoing a major expansion, which is a key drain on capital but promises higher margins.

Here's a quick look at the capacity additions coming online or expected by the end of 2025 to enhance this high-end focus:

• New hot-dip galvanizing line capacity: 600,000 tons per year.
• New cold rolling mill capacity: 1.6 million tons per year.
• Push-pull pickling line capacity: 550 thousand tons per year.

To put the center's growth in context, prior to these late-stage expansions, the Pesquería Industrial Center already had an annual production capacity of 4.4 million tons of hot-rolled products. This investment program, which included a total capital investment of approximately $1 billion, is designed to strengthen their competitive positioning in Mexico.

Finally, you need the liquidity to fund these massive CapEx programs. Ternium S.A. (TX) reported a strong net cash position of $715 million as of September 2025. This cash pile is essential, especially considering the company reported capital expenditures of approximately $711 million in the third quarter of 2025 alone, with more planned. The company announced a total CapEx target of more than US$2.5 billion for 2025.

You can see how these resources tie into the capital deployment strategy:

This combination of massive production scale, owned raw material supply, a high-tech manufacturing hub nearing completion, and a healthy cash balance defines the tangible assets Ternium S.A. (TX) brings to the table.

Ternium S.A. (TX) - Canvas Business Model: Value Propositions

You're looking at the core promises Ternium S.A. makes to its customers, the things that make their steel the choice for critical manufacturing.

High-end, value-added flat and long steel products for demanding industrial applications.

Ternium S.A. focuses on delivering specialized steel, not just commodity volumes. This is evident in their product development pipeline and existing market positioning.

• Ternium Lab has designed over +100 steel products for industrial applications since its launch, focusing on automotive needs like weldability, forming, stamping, fatigue, and energy absorption.
• The company is the leading supplier of flat steel to the Brazilian automotive industry.
• Usiminas, part of Ternium, operates a slab facility with 5 million tons capacity in Rio de Janeiro.

Here's a snapshot of their production footprint supporting these specialized offerings:

Compliance with USMCA's 'melted and poured' requirement, critical for North American automotive customers.

Securing compliance with the United States-Mexico-Canada Agreement (USMCA) rules of origin is a major value driver, especially for nearshoring automotive manufacturing.

The planned expansion at the Pesquería industrial center directly addresses this need. The new Electric Arc Furnace (EAF)-based mill is specifically designed to produce exposed automotive steel that meets the 'melted and poured' standard. This new facility is expected to come online in the fourth quarter of 2026.

Enhanced supply chain reliability and reduced lead times through regional presence.

By operating across the Americas, Ternium S.A. offers a regional advantage that translates to better service for its customers.

• Customer service is enhanced by reduced lead times.
• The company completed a new pickling line at its Pesquería complex by the end of 2024, expanding downstream processing capacity for high-value flat steel products.
• Ternium S.A. operates industrial plants across 9 countries.

Commitment to sustainability, targeting a reduction in specific CO2e emissions by 2030.

Ternium S.A. has updated its decarbonization goals to reflect a broader scope, signaling a serious commitment to lower-carbon steelmaking.

The revised 2030 target is to reduce emissions intensity by 15% compared to a 2023 baseline. The expected emissions intensity rate for 2030 is 1.35 tons of CO2 per ton of crude steel.

Key initiatives supporting this include:

• Commissioning of a wind farm in Argentina, which partially started operations by December 2024 and is expected to be fully operational by February 2025.
• This wind farm will replace 90% of the electricity purchased from third-parties in Argentina and is projected to reduce approximately 127 thousand tons of CO2 emissions annually.
• The new Pesquería DRI-EAF steelmaking project is expected to produce steel with less than half the CO2 emission intensity compared to previously possible methods.
• Since 2014, an energy efficiency program helped reduce CO2 emissions by 125,000 tons per year, while capturing 210,000 tons of CO2 per year.

If you're mapping out your supply chain risk, the shift to the new Pesquería EAF mill, starting in Q4 2026, is a key factor for both USMCA compliance and lower-carbon sourcing. Finance: draft the capital expenditure schedule for the Pesquería project by next Tuesday.

Ternium S.A. (TX) - Canvas Business Model: Customer Relationships

You're looking at how Ternium S.A. locks in its key industrial buyers and supports its broader ecosystem. It's not just about shipping tons; it's about embedding their steel into the customer's next generation of products. This relationship strategy focuses heavily on the industrial segment, which, for example, represented approximately 64% of Ternium's steel shipments in Mexico in 2024.

Dedicated technical assistance and collaborative product development with industrial clients

Ternium S.A. emphasizes deep technical partnership, especially with its industrial clients, which is key to supplying high-end steel products. This is evidenced by their focus on new capabilities to provide sophisticated steel products for industrial customers. For instance, Ternium actively supports local industry and technological innovation, as seen when they recognized agribusiness companies at Expoagro 2025 in Argentina, granting awards for projects that demonstrated impact on efficiency, safety, environmental care, and energy efficiency. The company's mission itself centers on creating value with clients, improving competitiveness and joint productivity. The investment in the Pesquería, Mexico industrial center, which started up its new hot-rolling mill in 2021, was aimed at developing new products to substitute imports, a direct result of collaborative development with local industrial needs.

Long-term contracts and tailored solutions for major customers in key sectors

The relationship structure is cemented through tailored solutions and long-term engagements, particularly in high-demand sectors. In Mexico during 2024, the industrial sector accounted for 64% of shipments, with the Automotive sector taking 27% of those shipments. To support these demanding sectors, Ternium S.A. has been investing in downstream capacity; the new project in Pesquería, Mexico, included a Push-pull pickling line with a capacity of 550,000 tpy and a new Cold rolling mill with 1.6 mtpy, both designed to deliver specific, high-quality materials. Customer satisfaction surveys, which covered key areas like technical services and new product development, showed positive trends, with satisfaction rates reaching 85% in Mexico, 84% in Argentina, and 93% in Colombia in 2024. This suggests their tailored solutions are generally meeting expectations.

Digital connectivity and an exclusive Webservice portal for customer self-service and order management

Ternium S.A. uses digital tools to streamline the commercial relationship, extending the benefits of their integrated processes to the value chain. The exclusive service portal, known as Ternium Activo, is central to this. A significant 80% of Ternium customers use the underlying Webservice for more efficient interaction. This platform is designed for self-service, allowing users to place orders, track shipments, make payments, and manage various commercial aspects. Furthermore, 12,000 storage locations are managed online through this system to enhance visibility and transparency of Ternium's processes. In Mexico, this digital consolidation moved operations from 28 separate systems to a single channel covering planning, scheduling, quality, shipment, and billing.

Direct engagement through the ProPymes program to foster customer competitiveness

The ProPymes program is a direct mechanism for fostering competitiveness among small and medium enterprises (SMEs) that are customers and suppliers. The program, which started in Argentina in 2002 and Mexico in 2006, aims to strengthen the value chain through training, technical assistance, and financing. The scale of this engagement is substantial, as shown by the most recent figures available:

This direct support is a core part of Ternium S.A.'s strategy to develop the local industrial ecosystem.

Ternium S.A. (TX) - Canvas Business Model: Channels

Direct sales force managing large industrial and construction accounts is central to Ternium S.A.'s strategy, particularly in Mexico, where the developed industrial sector accounted for approximately 64% of shipments in 2024. This direct engagement supports the focus on value-added products and tailored solutions for major clients.

Ternium S.A. maintains an extensive service center network for processing and distributing steel products across the Americas. The company's operational scope, for H&S System Coverage purposes, explicitly includes its service centers, and distribution centers. Furthermore, the ongoing expansion at the Pesquería complex in Mexico includes a new finishing center, which has already brought online 310,000 mt a year of customized products capacity, with further lines planned to start up by the end of 2025 or beginning of 2026.

Nationwide coverage is achieved through distribution centers and regional distributors in core markets like Mexico and Brazil. Mexico remains Ternium S.A.'s largest market, representing nearly half of total shipments. The company's channel structure across its main regions for the period ending June 2025 showed the following distribution by shipment volume:

Export channels serve other markets, including the US and Central America. Shipments to Other Markets fell by 14% year-over-year in the second quarter of 2025, primarily due to lower sales in the US. However, in the first quarter of 2025, steel shipments in Other Markets saw a sequential rise of 36%, partly from selling steel slabs to third parties. The company's total steel shipments in the third quarter of 2025 were 3.76 million metric tons (mt). Ternium S.A. also supports customer interaction through its digital service platform, Ternium Activo, allowing inquiries and purchases 24 hours a day.

The overall sales structure supports a total production capacity of 15.4 million tons of crude steel per year across its operations in the Americas. The Steel Segment's net sales for the third quarter of 2025 were $3.955 billion, contributing to a trailing twelve months (TTM) revenue as of September 30, 2025, of $15.71B.

Key elements supporting the channel execution include:

• Direct sales management for large industrial and construction accounts.
• An extensive network of service and distribution centers across the Americas.
• Focus on high-end value-added products, supported by the Pesquería industrial center.
• Digital sales enablement via the Ternium Activo platform.

The company's ability to service the USMCA region is being strengthened by investments, such as the new EAF-based steel shop and DRI module in Pesquería, Mexico, designed to comply with USMCA 'melted and poured' requirements, with a start-up planned for the fourth quarter of 2026.

Ternium S.A. (TX) - Canvas Business Model: Customer Segments

You're looking at the core buyers for Ternium S.A., the steel giant whose products form the backbone of major industries across the Americas. Ternium S.A. serves a diverse set of customers, but the focus remains heavily weighted toward key sectors in Mexico and Brazil.

Automotive industry remains a critical segment for Ternium S.A., particularly as a leading supplier of flat steel. This segment is vital in Mexico, where it accounted for approximately 27% of Mexico shipments in 2024, based on the latest available breakdown. The company also services this sector significantly in Brazil.

The Construction sector is another major end-market for the steel products Ternium S.A. produces. In Mexico, construction represented an even larger share of demand, making up approximately 37% of the shipments in 2024. This indicates a strong reliance on infrastructure and building activity within that market.

Ternium S.A. also caters to various Industrial manufacturers. These clients require specialized steel for their production processes. The company's focus on value-added products supports these diverse industrial needs. The broader industrial sector in Mexico, which encompasses these clients, represented about 64% of shipments in 2024.

Here's a quick look at the known breakdown of steel shipments by sector in Mexico, using the most recent published figures from 2024:

The industrial manufacturing customers Ternium S.A. serves include producers of:

• Home appliances
• Capital goods
• Containers

Also, the Energy sector represents a client base requiring specialized steel for infrastructure and various projects, though specific shipment percentages for this segment are not detailed separately in the latest public breakdowns.

Geographically, Ternium S.A.'s customer base is heavily concentrated in the Americas, with Mexico accounting for 52.5% of its regional distribution as of the third quarter of 2025. Brazil followed with 25.2% of regional distribution.

Finance: review the Q4 2025 guidance to see if the Mexico industrial/construction split has shifted from the 2024 figures by next week.

Ternium S.A. (TX) - Canvas Business Model: Cost Structure

You're looking at the hard numbers driving Ternium S.A.'s expenses as we close out 2025. The cost structure is dominated by input prices and massive, ongoing capital deployment.

Dominant Costs: Raw Materials and Energy

The cost of getting the steel made is heavily weighted toward inputs. In the third quarter of 2025, steel production costs decreased, which management explicitly attributed to lower costs for raw materials and purchased slab. This trend was also noted in the first quarter of 2025, where cost per ton dropped due to consuming lower-priced inventories of slabs and raw materials.

Here's a look at some key cost and efficiency metrics from the latest available reports:

High Capital Expenditure for Expansion

2025 is the peak year for capital spending, primarily funding the massive Pesquería industrial center expansion in Mexico. Ternium projected its total capital expenditure for 2025 to be around $2.5 billion. For context on execution, the third quarter of 2025 saw CapEx of $711 million, with management expecting around $600 million in the fourth quarter.

The overall investment for the Pesquería project itself has been revised to $4 billion. This project includes significant components:

• New Electric Arc Furnace (EAF) steelmaking plant capacity: 2.6 million metric tons per year (Mt/y) of slab.
• New Direct Reduced Iron (DRI) plant capacity: 2.1 Mt/y.
• New production lines: Industrial coil pickling, five lines for customized steel, a high-quality cold rolling line, and an industrial galvanizing line.

The new galvanizing line was slated to start production in December 2025, with the pickling line and tandem cold mill (PLTCM) scheduled for January 2026.

Operational Costs: Labor, Maintenance, and Logistics

Beyond the direct material and energy inputs, operational costs cover the necessary overhead to run facilities across multiple countries. These include labor, routine and preventative maintenance, and moving product and materials.

Ternium's competitive improvement plan for 2025 concentrates on optimizing the logistic network to streamline transportation. The company is also using technology to manage maintenance and quality.

• The company developed a new generation of expert systems to enhance process reliability and ensure steel product quality.
• These expert systems use large volumes of data generated by sensors and measurement devices.
• The overall goal is to eliminate inefficiencies across the production process and supply chain.

Investment in Digital Transformation and AI

While specific dollar amounts for pure digital transformation are often bundled into CapEx or OpEx, the focus on efficiency is clear through technological deployment. The use of expert systems to process sensor data for process reliability and quality control is a direct application of advanced analytics, which is the foundation of AI-driven efficiency gains in manufacturing.

Ternium S.A. (TX) - Canvas Business Model: Revenue Streams

Ternium S.A.'s revenue generation centers on its core business of steel production and sales, supplemented by its mining operations. The primary revenue stream comes from Sales of steel products (flat and long steel) to industrial and construction customers. For the third quarter of 2025, the Steel Segment generated net sales of $3.73 billion. This segment saw steel products shipments of 3,757 thousand tons in the third quarter of 2025.

The revenue breakdown by segment for the third quarter of 2025 provides a clear view of the operational contribution:

A secondary stream is derived from Sales of mining products (iron ore) to external customers. The Mining Segment reported shipments of 2,017 thousand tons in the third quarter of 2025. Year-over-year, the Mining Segment's net sales saw a slight increase in the third quarter of 2025, even with lower realized iron ore prices, due to higher sales volumes.

Overall financial performance for the relevant periods shows the scale of Ternium S.A.'s revenue generation:

• Net Sales for the twelve months ending September 30, 2025, totaled $15.711 billion.
• Adjusted EBITDA for Q3 2025 was $420 million, reflecting margin improvement from cost reductions.
• The Adjusted EBITDA Margin for the third quarter of 2025 reached 11%.
• Net Sales for the nine months ended September 30, 2025, reached $11,834,309 thousand.

The improvement in the Adjusted EBITDA margin to 11% in the third quarter of 2025, up from 10% in the previous quarter, was driven by lower steel production costs, including reduced raw material and purchased slab costs, alongside efficiency gains. This operational focus helps support the revenue base despite market headwinds. Finance: draft 13-week cash view by Friday.