Shares of Ternium S.A. (TX) are soaring on the back of surging steel prices and investor optimism surrounding the steel industry’s growth prospects amid an impending economic rebound. Although President Biden’s sizable infrastructure spending proposal is expected to boost the demand for steel, the question is, is this steel maker well positioned to capitalize on this? Read on. Let’s discuss.Based in Luxembourg City, Luxembourg, Ternium S.A. (TX) is a manufacturer of steel products in the United States, Mexico, and Argentina, among other countries. The company operates through Steel and Mining segments. TX’s stock has surged 33.2% year-to-date, and 185.5% over the past year owing to a substantial increase in steel shipments in the fourth quarter and investors’ concomitant bullish sentiment on the steel industry.
TX has reported significant earnings growth in its last-reported quarter, driven by strong demand from the construction and commercial markets, and growing demand for durable goods and building materials. The stock is trading just 4.5% below its $40.55 52-week high, which it hit on April 5.
The global stainless steel market size is expected to hit around $168.24 billion by 2027, growing at a 5.84% CAGR, according to Precedence Research. The Biden administration’s proposed $2 trillion infrastructure spending plan is expected to give a significant boost to steel demand, thereby improving steel manufacture TX’s growth prospects.
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