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Ternium (TX) Signs MoU With Vale for Steelmaking Solutions

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Ternium S.A. (TX - Free Report) recently signed a memorandum of understanding (“MoU”) with Vale S.A., wherein the parties agreed to develop steelmaking solutions directed toward reduction of CO2 emissions.

Ternium and Vale plan to develop economic feasibility studies of potential investments in an iron ore briquetting plant located at Ternium’s Brazil facility. It also intends to invest in plants to produce metallic products with low carbon footprint, using Tecnored, HYL and other technologies for iron reduction.

This move will help Vale achieve its commitment to reduce 15% of net scope 3 emissions by 2035. Moreover, Vale intends to lower absolute scope 1 and 2 emissions by 33% by 2030 and achieve neutrality by 2050. The plan is in-sync with the Paris Agreement, which will lead toward low carbon mining.

Ternium also noted that the signing of the MoU is an important step in its decarbonization strategy. This will help the company achieve its commitment to reduce 20% of its CO2 emission intensity by 2030.

Shares of Ternium have surged 200.5% in the past year compared with 123.2% rise of the industry.

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Ternium, in its last earnings call, stated that it expects continued strong performance throughout the balance of 2021. This is primarily due to the strong global steel market environment. The company forecasts EBITDA to increase sequentially in the third quarter, with rise in margins and higher volumes.

The realized steel prices in the third quarter are likely to keep rising in all regions, partly offset by higher cost per ton led by increasing raw material costs, gradually flowing through the company’s inventories.

Ternium S.A. Price and Consensus

 

Ternium S.A. Price and Consensus

Ternium S.A. price-consensus-chart | Ternium S.A. Quote

 

Zacks Rank & Other Key Picks

Ternium currently flaunts a Zacks Rank #1 (Strong Buy).

Some other top-ranked stocks in the basic materials space are Nucor Corporation (NUE - Free Report) , Dow Inc. (DOW - Free Report) and Cabot Corporation (CBT - Free Report) .

Nucor has a projected earnings growth rate of around 489.2% for the current year. The company’s shares have surged 153% in a year. It currently flaunts a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dow has an expected earnings growth rate of around 403.01% for the current year. The company’s shares have gained 32% in the past year. It currently sports a Zacks Rank #1.

Cabot has an expected earnings growth rate of around 138.5% for the current fiscal. The company’s shares have rallied 32% in the past year. It currently holds a Zacks Rank #2 (Buy).


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