Ternium (TX) Q3 2026 Earnings Call: EBITDA steigt um 10%, Q4-Ausblick stabil

Wichtigste Erkenntnisse

• Das bereinigte EBITDA von Ternium stieg im dritten Quartal 2026 im Vergleich zum Vorquartal um 10 % auf 785 Mio. US-Dollar, während sich die bereinigte EBITDA-Marge auf 16,9 % ausweitete.
• Die Stahlauslieferungen stiegen im Quartalsvergleich um 5 % auf 4,0 Mio. Tonnen, angeführt von Rekordauslieferungen in Mexiko und anhaltenden Marktanteilsgewinnen gegenüber Importen.
• Der operative Cashflow erreichte 613 Mio. US-Dollar. Nach Investitionsausgaben in Höhe von 398 Mio. US-Dollar belief sich der freie Cashflow auf 215 Mio. US-Dollar.
• Ternium beendete den September mit einer Nettoliquidität von 22 Mio. US-Dollar und verbesserte sich damit gegenüber einer Nettoverschuldung von 112 Mio. US-Dollar Ende Juni.
• Das Management erwartet, dass das bereinigte EBITDA im vierten Quartal 2026 weitgehend auf dem Niveau des dritten Quartals bleiben wird, da eine höhere Marge pro Tonne die saisonal bedingt geringeren Auslieferungen kompensiert.
• Der Verwaltungsrat hat eine Zwischendividende von 0,90 US-Dollar je ADS beschlossen, was einem Gesamtbetrag von 177 Mio. US-Dollar entspricht und am 17. November ausgezahlt wird.

Wichtige Finanzkennzahlen

In den ersten neun Monaten des Jahres 2026 näherte sich das bereinigte EBITDA mit einem Plus von 73 % im Jahresvergleich der Marke von 2 Mrd. US-Dollar an. Die Marge stieg von 10 % auf 15 %, vor allem getrieben durch einen Anstieg der realisierten Stahlpreise um 8 % bei stabilen Kosten pro Tonne.

Der Nettogewinn der ersten neun Monate lag bei 1,2 Mrd. US-Dollar, mit einem den Aktionären zurechenbaren Gewinn von 4,26 US-Dollar je ADS, was nahezu dem Dreifachen des Vorjahreswerts entspricht. Die Investitionsausgaben gingen um fast 40 % von 2 Mrd. US-Dollar im Vorjahr auf 1,2 Mrd. US-Dollar zurück.

Geschäfts- und Betriebsentwicklung

Mexiko

Mexiko blieb der wichtigste Wachstumsmotor. Die Auslieferungen von Ternium in diesen Markt erreichten im dritten Quartal einen Rekordwert, während das Liefervolumen in den ersten neun Monaten um 13 % zulegte. Das Management führte den Großteil des Wachstums auf Marktanteilsgewinne zurück, da inländische Produktion Importe verdrängte, begleitet von einer leichten Verbesserung der zugrunde liegenden Nachfrage.

Das Unternehmen sieht zusätzliche Nachfrage aus Infrastrukturprojekten, Rechenzentren, Gaspipelines und Investitionen in erneuerbare Energien. Die Kunden agieren weiterhin mit niedrigen Lagerbeständen; das Management geht jedoch davon aus, dass der Lagerbedarf bei anziehender Nachfrage steigen könnte.

Die mexikanischen Stahlpreise stiegen im dritten Quartal. Das Management erwartet, dass die Preise auf dem aktuellen Niveau verharren oder leicht steigen werden, wobei zeitliche Verzögerungen bei der Preisanpassung für Industriekunden dem vierten Quartal 2026 und potenziell dem ersten Quartal 2027 zugutekommen dürften.

Brasilien und Bergbau

Der brasilianische Stahlmarkt bleibt herausfordernd. Das Management verwies auf Importe aus Vietnam, Südkorea und Ägypten sowie auf indirekte Stahlimporte durch Fahrzeuge, die mit importierten Werkstoffen hergestellt oder montiert werden.

Ternium hat einen Teil des Betriebs von MUSA angesichts der Eisenerzpreise und Frachtkosten vorübergehend ausgesetzt. Das Unternehmen richtet den Geschäftsbereich auf das aktuelle Marktumfeld aus, wobei für das vierte Quartal mit einem weiteren Rückgang der Auslieferungen im Bergbausegment gerechnet wird.

Das potenzielle Bergbauprojekt Compactos wird weiterhin geprüft. Das Management rechnet mit einer Entscheidung im Laufe des Jahres 2027 und evaluiert Alternativen, die die Anfangsinvestition durch eine Aufteilung des Projekts in Phasen verringern könnten.

Argentinien

Energie, Bergbau und Landwirtschaft stützen die Aktivität weiterhin, doch die Haushaltsgeräte- und Automobilbranche sehen sich einer schwachen Inlandsnachfrage und Konkurrenz durch Importe gegenüber. Auch die Bauwirtschaft bleibt verhalten.

Ternium konzentriert sich auf Kostensenkungen, interne Effizienz, engere Beziehungen zu Industriekunden, handelspolitische Schutzinstrumente sowie institutionelle Schritte zur Verringerung der Steuerlast.

Projekt Pesquería

Der Bau des neuen Brammenwerks in Pesquería schreitet planmäßig voran; der Produktionsbeginn ist für Februar 2027 geplant. Die Anlage wird die vertikale Integration in Mexiko vertiefen und eine regionale Versorgung mit kürzeren Lieferzeiten sowie einem geringeren CO2-Fußabdruck ermöglichen.

Das Management bezeichnete 2027 als Anlaufjahr und erwartet für diesen Zeitraum keinen wesentlichen Gewinnanstieg aus dem Stahlwerk. Ein spürbarerer Beitrag wird für 2028 erwartet. Ternium schätzt den internen Margenvorteil bei Brammen auf 50 bis 100 US-Dollar pro Tonne, mit einem möglichen zusätzlichen Aufschlag für emissionsärmere Produkte, die in der Region erschmolzen und vergossen werden.

Prognose des Managements

Das Management erwartet, dass das bereinigte EBITDA im vierten Quartal 2026 weitgehend auf dem Niveau des dritten Quartals verharren wird. Die typische Saisonalität zum Jahresende und geplante Anlagenstillstände dürften die Auslieferungen leicht dämpfen, eine moderate Verbesserung der Marge pro Tonne sollte jedoch geringere Mengen sowie steigende Rohstoff- und Brammenkosten ausgleichen.

Ternium geht davon aus, dass die Volumina bis in das erste Halbjahr 2027 hinein weiter zulegen werden, insbesondere in Mexiko. Das Management deutete zudem an, dass Absatzmengen und Margen im ersten Quartal 2027 gegenüber dem Niveau des vierten Quartals steigen könnten, falls sich die aktuellen Trends bei Nachfrage und Preisen fortsetzen.

Das Unternehmen geht davon aus, dass in den nächsten zwei Jahren der Schwerpunkt auf der Umsetzung und Integration der jüngsten Investitionen liegen wird, anstatt ein weiteres großes Investitionsprojekt zu starten. Sollten eine verbesserte operative Entwicklung und eine geringere Kapitalintensität zu einer nachhaltigen Cashflow-Generierung führen, könnte dies dem Management zufolge langfristig höhere Dividendenausschüttungen ermöglichen. Ein konkretes Ziel für die Nettoliquidität wurde nicht festgelegt.

Risiken und Beobachtungspunkte

• Für das vierte Quartal wird aufgrund von Saisonalität und geplanten Stillständen an Produktionslinien mit einem leichten Rückgang der Auslieferungen gerechnet.
• Die Kosten für Rohstoffe und zugekaufte Brammen steigen.
• MUSA steht durch Eisenerzpreise, Frachtkosten und rückläufige Liefermengen unter Druck.
• Brasilien und Argentinien bleiben direkten und indirekten Importen ausgesetzt, einschließlich importierter Fahrzeuge und Erzeugnisse, die von Subventionen oder weltweiten Überkapazitäten profitieren.
• Der Zeitpunkt und die Ausgestaltung einer etwaigen Verlängerung des USMCA-Abkommens oder Erleichterungen bei den Maßnahmen nach Section 232 bleiben ungewiss.
• Das Brammenwerk in Pesquería wird einen schrittweisen Hochlauf erfordern, wobei für 2027 nur ein begrenzter Ergebnisbeitrag erwartet wird.
• Höhere Mengen und Stahlpreise könnten den Bedarf an Nettoumlaufvermögen erhöhen.

Wichtigste Punkte aus der Analysten-Fragerunde

Preise und Nachfrage in Mexiko: Das Management erwartet, dass die mexikanischen Preise nahe dem aktuellen Niveau verharren oder moderat steigen werden. Das Unternehmen sieht weiteren Spielraum für die Substitution von Importen und verweist darauf, dass monatlich über 400.000 Tonnen Flachstahlprodukte nach Mexiko importiert werden, die Ternium herstellen kann.

USMCA und Section 232: Das Management sieht eine Verlängerung des USMCA als vorteilhaft für die regionale Wertschöpfung an, nannte jedoch keinen Zeitplan. Eine Beilegung der Section-232-Maßnahmen könnte den Preisabstand zwischen mexikanischen und US-amerikanischen Stahlpreisen verringern. Die aktuellen Nachfrageprognosen enthalten noch keinen zusätzlichen Nutzen aus einer solchen Vereinbarung.

Kapitalallokation und Dividenden: Nach dem großen Investitionszyklus will Ternium der Umsetzung Priorität einräumen. Das Management erklärte, eine nachhaltige Cash-Generierung könnte künftige Dividendenzahlungen stützen, betonte zugleich jedoch den Bedarf an Nettoumlaufvermögen, fortlaufende Investitionen und den Wert ausreichender Liquidität angesichts von Marktvolatilität.

Usiminas: Die Vereinfachung der Unternehmensstruktur von Ternium bleibt ein langfristiges Ziel, doch laut Management gibt es derzeit keinen festgelegten Weg zum Erwerb der verbleibenden Usiminas-Aktien. Rechtliche Fragen und die Marktaussichten in Brasilien bleiben relevante Faktoren. Zum Rechtsstreit mit CSN gab es keine neuen Entwicklungen.

Compactos: Die Entscheidung ist weiterhin für 2027 vorgesehen. Ternium prüft mehrere technische Konfigurationen, darunter einen phasenweisen Ansatz mit geringerem anfänglichem Kapitalbedarf, hat sich jedoch noch nicht auf eine endgültige Struktur festgelegt.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Good morning, ladies and gentlemen. Welcome to Ternium's Conference Call to discuss the results for the third quarter 2026. We would like to inform you that this event is being recorded. [Operator Instructions]

We would like to remind you that this conference call is intended exclusively for investors and market analysts. We request you that any questions for journalists be dedicated to the media relations through our website in the press section.

With this, I would like now to turn the floor over Mr. Sebastián Martí. You may proceed.

Sebastián Martí

Good morning, and thank you for joining us today. My name is Sebastián Martí, and I am Ternium's Global IR and Compliance Senior Director. Yesterday, we announced our financial results for the third quarter and first 9 months of 2026. Today's call is intended to provide additional context to our presentation.

I'm joined by Maximo Vedoya, Ternium's Chief Executive Officer; and Pablo Brizzio, the company's Chief Financial Officer, who will discuss Ternium's operating environment and performance.

Following our prepared remarks, we will open up the call to your questions. Before we begin, I would like to remind you that this conference call contains forward-looking information and that actual results may vary from those expressed or implied. Factors that could affect results are contained in our filings with the Securities and Exchange Commission and on Page 2 in today's webcast presentation. You will also find any reference to non-IFRS financial measures reconciled to the most directly comparable IFRS measure in the press release issued yesterday.

With that, I'll turn the call over to Mr. Vedoya.

Maximo Vedoya

Thank you, Sebastián. Good morning, everyone, and thank you very much for joining Ternium's conference call today. Ternium had a solid third quarter. As we expected in our last call, EBITDA increased driven by higher shipments at a stronger margin. Cash generation was healthy with $600 million from operations in the quarter.

In this positive environment, our Board of Directors declared an interim dividend of $0.90 per ADS, in line with the interim dividends paid in 2025 and 2024.

Now let's go through our main markets, starting with Mexico, where we see encouraging signs. In the third quarter, our shipments to the Mexican market reached an all-time high. And in the first 9 months of the year, they grew by 13%. Most of this growth comes from market share gains as we continue to replace imports.

At the same time, demand is slightly better. We are also starting to see progress in infrastructure projects, which should support our volumes in the coming quarters. Two trends are also adding demand. The first is data centers, which require steel for racks and generate indirect demand for healthy -- heavy equipment and air conditioning. The second is energy, with many gas pipeline projects under development.

Looking ahead, the fourth quarter will show the usual seasonality. We expect volumes to keep growing further into the first quarter of 2027. Overall, the outlook for volume and prices in Mexico is positive.

In Brazil, the steel market remains complex. World Steel now expects apparent steel consumption in Brazil to fall 2.7% this year. Imports are the main concern. The antidumping measures against China introduced early this year have reduced import from that origin. However, imports from Vietnam, South Korea and Egypt are growing strongly. Indirect imports of steel also continue to put pressure on the industry, especially through cars that are made abroad or only assembled in Brazil with imported materials.

The government is gradually reinforcing trade defense, and we trust it will continue on this path. More is still needed to ensure fair competition, including closing the many loop holes that still make trade measure less effective. In this environment, Usiminas will need to keep working hard on its competitiveness.

Our Mining business will also require a strong effort. Given current iron ore prices and freight cost, we have temporarily stopped part of the operation at MUSA, and we are fully focused on restructuring them to adapt to this challenging scenario. With Ternium Brasil and Usiminas, we have a strong industrial base in the country, and we will keep working to make the most of it.

In Argentina, our view of the market is similar to last quarter. Energy, mining and agriculture continue to drive activity. On the other hand, industries such as home appliances and automotive face a difficult environment with soft local demand and strong competition from unfair imports.

Construction, an important sector for us in this market remains at low levels. In this context, we're working on a productivity and efficiency agenda in our operations with 4 fronts: internal efficiency and lower cost, being close to the industrial customers, defense against unfair trade imports, especially from China and institutional actions to reduce the tax burden.

Before moving on to my conclusions, let me share some recent highlights. We continue working to stay close to our customers, and this commitment has been recognized. Regal Rexnord gave us its 2026 Strategic Partner Award. Home Depot named us Supplier of the Year 2026 and Caterpillar renewed our Supply Excellence Certification at its highest levels.

Across our operations, we also keep raising our environment and safety standards. In August, we opened a new environmental monitoring center at our Guerrero plant in Monterrey, adding to those at our main facilities in Brazil and Argentina. And today, we are holding our Safe Supplier award in Mexico to reinforce our commitment to zero accidents.

To sum up, this was a solid quarter for Ternium with higher EBITDA and strong cash generation. Looking ahead, we expect our volume to keep growing in the first half of 2027. At Pesquería, construction of our new slab mill is progressing as planned, and we expect to start production in February. This mill will increase our vertical integration in Mexico and allow us to offer local supply with short lead times for our industrial customers with a much lower carbon footprint.

I am confident in Ternium's prospects for the quarters ahead, and I want to thank our team for their hard work and their commitment. Pablo, please go ahead with Ternium's performance in the third quarter.

Pablo Brizzio

Thanks, Maximo, and thanks, everybody, for participating today in our call. So let's turn to our performance in the third quarter. Adjusted EBITDA increased 10% sequentially to $785 million in the third quarter, with adjusted EBITDA margin expanding further to 16.9%. Performance was driven by our Steel segment, which delivered higher volumes and improved realized prices, especially in Mexico. These gains were partially offset by higher cost per ton and a lower contribution for our Mining segment.

Looking ahead, we expect adjusted EBITDA in the fourth quarter to remain broadly in line with the third quarter. Typical year-end seasonality should lead to a slightly lower shipment, but this should be offset by a modest improvement in margin per ton and higher revenue per ton more than offset rising raw material and slab costs. Net income was $368 million in the third quarter compared to the second one. Higher operating income and a positive swing in net financial results were more than offset by higher income tax charges. We have in the third quarter deferred tax losses of $116 million, mostly related to the impact of the Mexican peso depreciation, compared to a gain of $86 million in the previous quarter.

Let's review the Steel segment performance now. Shipment rose 5% sequentially in the third quarter, reaching 4 million tons. Mexico has been the main driver of our shipment growth in recent quarters. In the third one, we gained market share again. Commercial market shipment kept rising with significant year-over-year growth and industrial volume also increased both sequentially and versus last year.

Moving to the Steel segment performance. Cash operation income rose 16% sequentially, supported by higher realized steel prices and shipments. This was partially offset by higher cost per ton, mainly reflecting increased raw material and purchased slabs with ongoing efficiency initiatives helping to mitigate this. Steel margin expanded to 17%.

Turning now to the Mining segment. Shipment declined in the third quarter and more expected for the fourth quarter. This reflects the partial suspension of MUSA operations already mentioned by Maximo. Cash operating income decreased sequentially on lower volume and slightly lower realized iron ore prices with the margin narrowing to 16%.

Let's now review the cash flow and balance sheet. Cash flow -- cash from operations was $613 million in the quarter. This includes a $148 million increase in working capital. This increase came mainly for higher receivables, reflecting higher volume and steel prices and from higher inventory value due to the higher unit cost.

Capital expenditure amounted to $398 million, mostly as a result of reconstruction of the new slab mill at the Pesquería Industrial Center, which continues to advance according to plan. As a result, we generated positive free cash flow of $215 million in the quarter. With this, we ended September with a net cash position of $22 million compared to a net debt position of $112 million at the end of June. This improvement was partially offset by a $74 million decline in the fair value of Argentine securities.

Finally, let me close with a quick look at our performance in the first 9 months of the year. Adjusted EBITDA reached nearly $2 billion, up 73% year-over-year with the margin expanded to 15% from 10% in the same period of 2025. Higher realized steel prices were the key driver, rising 8% year-over-year, while cost per ton remained stable, supported by several initiatives that enable an increase in efficiencies and productivity across our operations.

Net income for the period amounted to $1.2 billion with shareholders earning of $4.26 per ADS, close to 3x the prior year level. Capital expenditures reached $1.2 billion in the first 9 months, down almost 40% from $2 billion in the same period of last year as we move beyond the peak of our investment cycle.

Finally, Ternium Board of Directors approved an interim dividend of $0.90 per ADS, or a total of $177 million payable on November 17. With this, we are concluding our prepared remarks for this quarter. So we welcome now any questions that you may have. Please, operator, go ahead.

Operator

[Operator Instructions] Our first question comes from Tathiane Candini from JPMorgan.

Fragen und Antworten

Tathiane Candini

Maybe to start, I would like to just explore a little bit more on the Mexican prices. You noted on the outlook that we should expect a higher margin per ton, and we saw already some price hikes during this quarter, like around 5% quarter-over-quarter. So I just wanted to explore a little bit more on what are your expectations for the fourth quarter when it comes to prices? What should we expect regarding to mix?

And my second question is regarding capital allocation. I think you already explored a bit this in the last quarter. With Pesquería now coming in the ramp-up, we should expect lower CapEx for next year. So just wanted to take your heads and try to understand a bit on what your perspective on the cash generation for next year, if you could expect some changes on dividends, higher dividends for next year? Or if we should expect something more towards 2028?

Maximo Vedoya

Thank you very much, Tathiane. Let me start with the first question. Mexican prices, I would say, Mexican prices are -- continuing to growing or increasing. And you saw that in the third quarter. Probably in the fourth quarter, is going to be a little bit more up. You have to remember that they are not going to get any near the U.S. prices, and we discussed that several times why. But we saw -- we are seeing a strong demand. We are seeing a strong demand in Mexico, as we said. We are seeing a strong demand in the U.S. So I think that prices will continue to hold in this level or a little bit up. You also have to consider that the industrial customers has a lag in the prices. So that lag is going to be reflected in the fourth quarter and probably in the first quarter of next year. I think with that, I covered the first one. Do you want Pablo, the second one?

Pablo Brizzio

Okay. Let me take the second one. Thanks, Tathiane, for the question. So as usual, we discussed the capital allocation issue. You know that whenever we are ending a big CapEx plan, we need to take a couple of years to digest and to take advantage of everything that we have done. And so in the next couple of years, difficult to see any big project coming out of Ternium.

Of course, there are one that you already know that we already mentioned many, many times, which is our mining activity in Brazil that we will continue to analyze and probably Maximo, you can add to that a little after my answer.

But in general, what you should see is different things. First of all, we will -- we will move into next year with probably higher cash flow generation because of the better performance that Maximo mentioned during the initial remarks and also because of reduction in CapEx that after the big CapEx plan and moving from the big number that we have last year, this year will be around $1.2 billion next year, $1.2 billion. So this will add to your point.

So if this is a trend that we will follow and without any big project, we will basically if this trend continue to reinforce our dividend payment. And besides that, we will be adding to the strong financial position of the company to be prepared for the possible next round of CapEx or decisions that we may take. You know that we have different propositions for the future. But in general, this is something that we take very seriously, and we take some time to do that. So I don't know, Maximo, if you want to add something?

Maximo Vedoya

No, I think it's clear. I mean our next 2 years will be -- our main agenda is execution. It's to focus on how we digest all the investment that we have done. I mean you know Pesquería is something fantastic. And it's starting now in February, we already have started a lot of lines, but in February, the steel shop is starting. And this will give us a huge power of how we can manage even stronger relationship with all our customers. So we want to execute that. And then probably 2028, we'll see what we do next. But this is the focus for next year. I hope with that, at the end, we answered both questions.

Tathiane Candini

No, you completely did. I just wanted to make a follow-up on the Compactos Project that you mentioned. So is there any kind of change on the time line of the decision since we have, like, as you mentioned, a more challenging environment when it comes to price and iron ore prices and the shutdown on partial of the Usiminas production?

Maximo Vedoya

There's no real change today. As you know, we -- the decision, we always said we have to make it in 2027. Probably that decision is still there in 2027, and we continue analyzing the different options that we have with Compactos. There are several -- as you said, several technical solutions that we are finding where maybe we can do a project with a little bit less or much less investment in a first stage and a bigger investment in a second stage. But all those things are things that we are analyzing. So there may be changes to what we thought originally was the big Compactos project. But to be honest, all those alternatives, we are analyzing, and we will reach a conclusion during 2027. In the meantime, we are progressing with all the license we need to have, but those are not a very big investment.

Operator

Our next question comes from Daniel Sasson from Itaú BBA.

Daniel Sasson

My first question is related to the USMCA or Section 232 negotiations. If you could update us on where the U.S.-Mexico talks stand right now, if you think that a still specific deal is more likely than a full USMCA review, your base case for timing of the 232 relief. So what do you assume for Mexican HRC prices and for margins once that happens, right?

And my second question, you've said in the past that buying the remaining Usiminas shares would make sense long term, but that conditions on the shares complicate it short term. So with the net cash position restored, right, and CapEx falling, as Tathiane mentioned in the previous question, what's the timing and the path for delisting or tender offer? And what conditions remain? Does the litigation that you have related to Usiminas share play a role on this sense? So if you could just maybe strategically or qualitatively discuss this issue, that would be great.

Maximo Vedoya

Thank you, Daniel. I'll start with the first question, USMCA 232. I continue seeing this the same way as we talked during the Analyst Day and we talked in the last conference call. I think there is a very good -- I mean, making a renewal USMCA is good for everybody, not only for Mexico, probably it's very good for the U.S. also. And I always have said this. I think that there's still so many things to discuss on a renewal USMCA, especially on fortifying rule of origins.

And I think the 2 governments or the 2 administrations are very committed to this. They see that having more value-added production in the region is something very good. This is not only the U.S. vision. It's also the Mexican vision. So at the end, I think that it's very reasonable to have a USMCA renewal on some date. Which one? I cannot say that.

What I do think that one of the Mexican priorities is to resolve the 232, not only steel, but steel aluminum and the derivatives. And I know they are working through that. What type of agreement are they going to make? I don't know yet. But I think that, that is a possibility. You asked this deal, what should it do with our price? As I said before, I don't think that it does anything to the U.S. prices. Probably what it does is that you have more reason to the Mexican price today is -- they have a huge gap to the American price, to the U.S. price. And probably an agreement will make that, that difference is lower in the future. So that's from the USMCA.

Usiminas share, I mean, you asked if we have a path or -- today, we don't have any path to that. As I said several times, simplifying our corporate structure remains part of our long-term objectives. But having said this, Usiminas share is not only a financial decision. We have to consider other factors. We have, as you said, some legal issues pending. And also, we need to see where Brazil is going in the future. So there are many things still on the path before we take any decision in this respect. I hope that's okay.

Operator

Our next question comes from Matheus Moreira from Bradesco BBI.

Matheus Moreira

Two on my side. First, maybe a follow-up on the capital allocation question, but focusing more on dividends. I mean you kept the nominal dividend unchanged versus last year despite the company being on a much better position in terms of results, right, with CapEx, as Daniel mentioned, set to sharply decline in the coming quarters. Just wanted to better understand the rationale behind the dividend and whether you see room for more aggressive payouts going forward? That's my first question.

And then my second question on demand in Mexico. I mean, I wanted to get an overall view on how are you seeing overall demand trends in Mexico. Your volumes in the third quarter were very strong. But my understanding is that this was mainly driven by import substitution rather than underlying downstream demand growth. So I wanted to just touch and get your color on how do you see demand in Mexico by each end use segment? And how do you see demand evolving, especially in a scenario where U.S. and Mexico reached an agreement on steel? Those are my 2 questions.

Pablo Brizzio

Okay. Thanks, Matheus, for your questions. So let me take the first one, which was related to dividends. Let me divide it in 2. The first one is a long-term view, which is very similar to the history that we have, which is that whenever we saw that the trend is positive to raise dividend and sustain that in the long run, that's something that we should -- that we will do. And clearly, if the projections and the views that Maximo mentioned and we have for Ternium are in that direction, clearly, that will be something that with a very high possibility.

In relationship to current dividends, you know that in the past, we have also a proposition of an interim dividend that reflects around 1/3 of the total dividend of the year. So this is the situation, and this is what we have just confirmed with the $0.90 dividend, we should be back to the level of dividend that we paid 2 years ago after the reduction that you saw last year because we were in the middle of a very uncertain period with the war in the Middle East. So this should be a trend.

Of course, this needs to be confirmed by our Board of Directors when they propose that to the shareholders' meeting, but this should be the case, and this should be the tendency for the future.

Maximo Vedoya

And Matheus, the second question, demand in Mexico. You are right in part of what you say -- in a part of what you're saying. This increase in our shipment is due mainly because we gained market share against imports. But -- and the market is growing, but it's growing at a very slight pace, at least these 9 months. But we are seeing a pickup in demand for the following quarters. So there are 2 things here. We are gaining market share, and we are seeing in the following quarters that demand in Mexico is starting to grow. There are -- and this is by several sectors, but mainly it's infrastructure. There are more projects, public infrastructure, but also there's private projects.

For example, energy line pipe, as I said, but also we are seeing more investment in renewable energy with all these schemes that were made between CFE and the private sector. And we're seeing that, that will start construction in 2027. That has a lot of steel in there. And also, we are seeing more demand from the industry. So there are 2 things here then. Gaining market share in the past, and we will continue to focus on gaining market share, but also we are seeing a pickup in demand. All this pickup demand doesn't have yet a solution for the 232. So what you said of if there is an agreement, probably that it's on top of what I'm saying because in this forecast, we don't see yet any demand coming from USMCA solution or whatever you can call it. So I hope that Matheus answered the second part also.

Operator

Our next question comes from Emerson Vieira from Goldman Sachs.

Emerson Vieira

So I have 2 questions. First of them on the market share dynamics, I just wanted to understand, I mean, how much room we still have to continue to gain market share over imports? I think in the Capital Markets Day, the company mentioned you were running at like 50% market share with certain imports declining by 10% to 11% in the first semester of this year. So going forward, I mean, how much further room do you have to gain market share on imports?

And then on dynamics as well of the underlying demand, just to confirm here. So the value chain still remains with low inventory levels, right? I recall that prior quarters, you were mentioning that you were seeing some movement in restocking, but it still seems that there's no restocking happening at this point.

And also a second one on Compactos, you mentioned a potential change in the project scope, right, with higher CapEx upfront -- I mean, with lower CapEx upfront and higher CapEx later on. Can you give us more color on that in terms of what could be the potential change to the CapEx being split between those 2 phases, please? And in terms of how the project would change indeed with this revision?

Maximo Vedoya

Thank you, Emerson. Yes, market share, I mean, there is a big room that we can increase. Today, imported in Mexico, if you take only flat products and flat products that we can produce, I think there are other things that tinplate that we don't produce and plates there are more than 400,000 tons every month that are imported in Mexico. So you make the math, and I don't see any problem in taking more part of that. I mean we have the product, we have the service, we have everything.

So I think what we do need is to start continue working as our commercial team are working to increase little by little this market share of all the huge market. We're talking about 5 million tons a year, 6 million tons.

So again, I mean, it's up to us to start to gain part of that. Compactos look, we are still looking at the Compactos in a sense. There are several alternatives that we are analyzing. One of those is what I said that like putting first some of the part of Compactos and then the other. But to be honest, we are not ready today to see that this is feasible or not. It was an example of several things that we are seeing. And so we will wait until probably next year to see if one of this is feasible, especially in this new environment of prices of iron ore and which one will be. I hope that answered both questions, Emerson. I don't remember in the first one, you also were asking something about stocks or something like that.

Emerson Vieira

Yes, if you were seeing some movement in restocking in your customers.

Maximo Vedoya

No, not yet. It's still the same. I mean they are working with low inventories, to be honest. And they were working with low inventories because of the market dynamics. Now that demand is starting to pick up, I am thinking that inventories should increase also. But we are not seeing any change in inventory levels or the low inventory levels of our customers.

Emerson Vieira

All right. And do you know what could be, I don't know, a normalized inventory level at your customers?

Maximo Vedoya

No, it depends a lot...

Emerson Vieira

At least a backlog number from the past.

Maximo Vedoya

No, it depends a lot in every industry. Every industry has a different number, commercial or industries or automotive. But what we are seeing in all that from a usual perspective, they are low in inventories and every automotive is low in inventories across the board. They usually have a lot of inventory. Now they are low, but they are standard. And demand is, as I said, starting to pick up.

Operator

Our next question comes from Alfonso Salazar from Scotiabank.

Alfonso Salazar

Yes. I have 2 questions. Look, we have seen many cycles in this industry. But the question that I have for you is, how do you see the normalization of markets in Mexico and Brazil, in Argentina? I'm not going to ask you about the timing because that's very hard to say anything about. But what do you expect to see in the long term in these 3 main markets for Ternium in terms of normalized EBITDA margins, market dynamics, different conditions?

And related to this question, the second one is, are you reviewing the expected exposure by industry across countries. And the reason why I'm asking you this is because without industrial policies in Latin America, what we have seen, for example, in autos is a flood of autos from China, cheap autos from China. So this is certainly a problem for long-term steel demand. And I don't know if you are considering this in your projections. Anything that you can say about how this exposure to different industries across the region would be very helpful.

Maximo Vedoya

Yes. Thank you, Alfonso. And that's a very good point. And let me start with that second question. I mean, as I said, unfair trade is not a problem only from the steel industry. And it's very clear, for example, what is happening in cars in Brazil that you mentioned, with imports from a lot of Chinese car manufacturers that when you see your financial, their subsidies are 15% to 20% bigger than whatever any automotive industry will have in Brazil or any other countries. So this is the main issue. I think in this regard, the U.S., Europe, Canada, they are taking the lead, not only fighting unfair steel trade, but fighting unfair trade. Mexico is following. So Mexico is starting to do a good job. And I think Brazil is starting to realize that the problem is not only steel, but this.

So you're right. For normalized market in Brazil, these things has to take into account. We are expecting that the Brazil government start seeing these things. I mean -- and we know they're starting to see. We have to see how they react. And the market will normalize when they react to this trend of unfair trade imports. I think Argentina is still on a further -- and still has more work to do than Brazil, and Brazil has more work to do than Mexico, and Mexico has still some things to do compared to the U.S.

So this is my vision. But the truth is that the world is reacting to this. I mean if you see we have the G20 meeting in Milwaukee, I don't know, a month ago, I was there with all the Ministers of economy. And the decision of what they ended up saying in the meeting was very strong because they have the G20 Global Excess Steel Capacity Forum over there. But they also mentioned all the industries where unfair trade, overcapacity and subsidies are destroying the market.

So today, even the G20 has acknowledged the huge problem that this unfair imports are causing to all industries. And I think most of them are reacting. So that's my vision in that sense. It's something to be considered, it's something to be very spoken about, and I think the governments are starting to react. I hope I answered that second question, Alfonso.

Alfonso Salazar

Yes. Just a follow-up on Argentina. There is [indiscernible] released recently a report basically saying that they have now a more open market approach to trade. So just wondering how is this affecting you? And how is this -- do you see that evolving?

Maximo Vedoya

No, Argentina, the imports are a big problem. I think Argentina, as you said, and as I mentioned, Argentina, the government of Argentina has a very good -- I mean, it's working very hard to normalize the macro economy, but it's yet to realize the big problem that the excess capacity in several industries are damaging the industry in Argentina. And that is a problem.

I think there is some change in the mood in saying we have to make this growth in energy and mining, be also a growth of the industry and how the industry of Argentina can support that growth in oil and gas and in energy and in mining. But it's still a subject that has to be developed.

Operator

Our next question comes from Ricardo Monegaglia for Safra.

Ricardo Monegaglia Neto

First one, we saw recently that Mexican prices widen against U.S. prices. I wonder if you have any clue on what caused that or if it's only temporary? And a follow-up on that. We see a more strict treatment against imports in the U.S. So I wonder if in your view, you think Mexico could take a more strict approach as well to imports, not only steel, but also indirect imports of steel such as autos, as you mentioned. Do you think that is on the discussions currently? I'll ask my second one later.

Maximo Vedoya

Yes. Ricardo, thank you. For sure, the agenda in Mexico, I think, is quite similar to the one in the U.S. If you recall, 1 year ago, the Mexican administration put a decree where they increased tariff of 1,100 products -- of that 200 were steel, but all the others were different products in the value chain. So I think the vision that the Mexican admin has is to increase value added in the region, to increase trade with the U.S., but trade that has more value added, and it's not only maquila as they call it. So I think that's something that is in the agenda, and they're working on it.

Of course, not with the same -- they cannot do it in the same pace as the U.S., Mexico is a different economy. They have different needs. And I think it's the good approach is to see exactly where Mexico can push for these strict rules. Prices, they are a little bit wide because the U.S. increases a little bit more. But if you take the percentage, they're still kind of the same. So I think it's only because prices continue to increase that the difference in dollar per ton is different.

But as I said, I mean, this is the difference between the 232. If you get rid of the 232, probably Mexican prices will go again to be the same in the U.S. at the U.S. prices.

Ricardo Monegaglia Neto

Yes, I agree. And my second question on the Pesquería upstream project. We are getting closer to the startup. But could you remind us, please, on the contribution that you expect from this project across 2027? Maybe if you could split between the halves of the year would be great.

Maximo Vedoya

Yes. Well, as I said before, remember, we are starting this huge project. So 2027 is a ramp-up. It starts in February, but this is a very, very complex equipment. And so I don't expect a huge increase in our profit because of the Pesquería. Probably it's -- I mean, it can be higher, but not because of the steel shop. What we are thinking is more in the 2028, is for once, the margin of the slabs is probably between $50 and $100. So that's what we changed the -- when we use slab from Pesquería instead from buying abroad. But also this is much sophisticated products with conditions of very low carbon emissions and of melted and poured in the region. So we are thinking of a price premium when we sell this product that will add to that margin that I already said, Ricardo. But you will see that probably in 2028, to be honest.

Ricardo Monegaglia Neto

Perfect. So a lower cost of slabs and also maybe potentially an increase in realized price once...

Maximo Vedoya

Exactly.

Operator

Our next question comes from Marcelo Arazi for BTG Pactual.

Marcelo Arazi

I wanted to discuss a bit the outlook that you guys provided for Q4. You mentioned that shipments decline a bit and some increase in raw material prices. But looking at the speech that you guys provided, we have been seeing demand peaking over the next couple of months, space for further [indiscernible] market share gains and prices are still very strong. We are seeing prices of HRC Mexican prices on Platts rising more than 40% year-over-year, while Ternium prices increased only 15%. So it seems like there is still some room for further growth. Is it fair to say that the outlook is somewhat conservative for Q4 and we could potentially see some EBITDA increase even amid the weaker seasonality?

Maximo Vedoya

Thank you, Marcelo. I don't think it's conservative, to be honest. You have to remember, December, it's a very low month in all the 3 of our markets. And to be honest, January is also low in Argentina and Brazil. So seasonally, we are going to have less shipments. And we also have several stoppage for CapEx in some of the lines. So we are going to see a little bit volume decrease that is very -- it's going to be compensated by the margin increase. And so that's why we put that outlook. What you can say is that the demand and also probably margins are going to increase in the first quarter. That's probably a good assumption to make.

Operator

[Operator Instructions] Our next question comes from Caio Greiner from UBS.

Caio Greiner

Two quick questions from me. Just circling back on the capital allocation theme. When we think about 2027, I mean, Ternium is supposed to generate a whole lot of cash. I mean it's supposed to be like $1 billion to $1.5 billion depending on the estimate, depending on the EBITDA and the electricity prices that you use. But no matter what, I mean, it's going to be a very, very strong cash build for next year.

And obviously, when we look at your net debt, net cash position right now, you're close to zero. And so we're just looking at this and saying, okay, so you're starting to build a really elevated net cash position for next year. So you could end the year at [ 500 million to 1 billion ] in net cash depending on the dividend that you pay. So it seems a little bit too high. I think the market is always wondering what are you going to do with this cash. And we do understand that Ternium is more on the conservative side when it comes to dividend payments, when it comes to even just the net cash position that you hold.

So I was just wondering, do you have a net cash target that we can use for next year that you think would be appropriate and that we can think about this target as you could potentially pay additional dividends to your 2025 payment, which is what you suggested was going to be the case for 2027. Is there any indication here that we could work with in terms of your target net cash balance for 2027?

And the second question real quickly on the CSN litigation. Just wondering if you have any update there on how the litigation going.

Maximo Vedoya

Thank you, Caio. CSN, we don't have any update. Things are the same as we have always -- as the last quarters. So we don't have anything to add about that. For the first part of the question, first of all, we don't have a net cash objective or target. And the numbers you said could be right. But remember that we have to digest the investment. And although we see, as I said, a very positive market outlook, you have to remember there are always seasonalities and there are always things that could happen. So in a sense, we are going to wait a little bit until what to do. And if we may change our dividend policy in late 2027 or '28. We don't have -- I mean, we don't have to do it right now. I don't know, Pablo, if you want to add something to that.

Pablo Brizzio

Of course, the numbers could be that one or others, but we continue -- we will continue to have CapEx that will be higher than normal. And if the trend of prices and volumes that we mentioned are the right one, clearly, we will increase our working capital needs. So that will add to the needs of utilization of cash. But in general, as Maximo already mentioned, if the trend is a positive one, this should be a signal for an elevated dividend payment in the future if we believe that this can be sustained.

So I think that the signals are there for a better distribution in the near future, taking into consideration that there will be yet a significant level of cash utilization during the quarter or during the next year. And again, as we always said, sustaining certain level of cash is not something that we consider a negative situation because of all the volatility that Maximo mentioned and the possible opportunities that we may find in the near future after digesting all the CapEx that we are doing.

Operator

[Operator Instructions] Our next question comes from Carlos De Alba.

Carlos de Alba

Just the question is on what Maximo said 2 questions ago. Maximo, did you mention that you see higher margins and maybe higher EBITDA in Q1 2027 versus fourth quarter?

Maximo Vedoya

Probably, Carlos. Yes. What I said is talking about Mexico because the question was about Mexico and if we were conservative about volumes in Mexico. And I said in the fourth quarter, we are not conservative because usually, the fourth quarter in December -- December is not a very big month for Mexico. But we are seeing today that volumes in the first and second quarter are probably higher than the fourth quarter. So the demand is picking up for those months. And we are not seeing much changes in the prices. I mean we are seeing that the price trend will continue in the first quarter.

Carlos de Alba

Yes, that's what I -- when I looked at the guidance for the fourth quarter of stable EBITDA, my first reaction was that it might be conservative, broadly speaking, maybe not necessarily just in Mexico. But look, in Mexico, there is obviously a lag in pricing. Prices have continued to go up. So I would maybe thought that there was room for a better fourth quarter EBITDA than the third quarter. But now I guess they may be stable in the fourth quarter and the room for higher EBITDA in Q1 and Q2.

Maximo Vedoya

That's probably what we are seeing, Carlos today because -- and you have to take into account that Brazil also is seasonally low in December. Argentina is very low in December. And then Brazil is low in January also. So those -- all those things, you have to take it into account, and you'll see that probably it's flat in the fourth quarter and something better in the first quarter.

Operator

That concludes the question-and-answer session. I would like to turn it back over to Mr. Maximo Vedoya.

Maximo Vedoya

Well, thank you, everyone, for joining us. And as always, if you have any comments or questions, we're always welcome. Have a very good day.

Operator

Ternium Conference has now concluded. Thank you for attending today's presentation. You may now disconnect, and have a good day.