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  Ternium S.A., Société anonyme

Registered office:

     26 Boulevard Royal, 4th floor

   L-2449 Luxembourg

R.C.S. Luxembourg B 98 668

www.ternium.com

TERNIUM S.A. HAS CLAIMED CONFIDENTIAL TREATMENT OF PORTIONS

OF THIS LETTER IN ACCORDANCE WITH 17 C.F.R. §200.83

December 16, 2022

Office of Manufacturing, Division of Corporation Finance,

Securities and Exchange Commission,

100 F Street, N.E.,

Washington, D.C. 20549-4631.

Attention:  Mr. Charles Eastman

      Ms. Claire Erlanger

Re:       Ternium S.A.

Form 20-F For the Year Ended December 31, 2021

Form 6-K furnished April 27, 2022

File No. 1-32734

Set out below are the responses of Ternium S.A. (“Ternium” or the “Company”), to the comments of the Staff (the “Staff”) of the United States Securities and Exchange Commission (the “Commission”) set forth in its letter dated November 29, 2022, to Mr. Pablo Brizzio, the Company’s Chief Financial Officer. The responses below are keyed to the headings indicated in the Staff’s comments and are designated with the letter “R” below the comment number. In some cases, the responses address more than one comment. The comments themselves are set forth in boldface type.

Response Letter dated November 29, 2022

Note 4. Segment Information, page F-40

1.We note from your response to comment 3 that your CODM reviews the Commercial and Industrial Performance Report on a monthly basis, which includes financial information [on] Mexico, the Southern Region, Brazil and Other Markets business units. We continue to have concerns about your identification of your operating segments. Tell us in detail why these business units do not meet the operating segment characteristics described in IFRS 8 paragraph 5. Specifically address in your response how you considered whether this business unit financial information represents operating results that are regularly reviewed by your CODM to make decisions about resources to be allocated to each business unit and assess its performance.

R:        As an introductory matter, the Company would like to clarify the meaning of the following two terms, which have been repeatedly used in the Company’s responses to previous Staff’s comments and are being used in this response letter:

“Business Unit” means a market or group of markets under the supervision of an Area Manager where Ternium sells products to unaffiliated third parties.

“Production Unit” means an industrial facility or group of industrial facilities under the supervision of an Area Manager where Ternium products are manufactured.

“Profit Center” means and includes each of the Profit Center Steel and the Profit Center Mining.

The Company respectfully informs the Staff that the financial information included in the Commercial and Industrial Performance Report regarding its “Mexico,” “Southern Region,” “Brazil” and “Other Markets” Business Units does not meet the operating segments characteristics described in IFRS 8 paragraph 5 for the following reasons:

a.The requirement of paragraph 5(b) of IFRS 8 is not met with respect to the Business Units because the CODM makes decisions about allocating resources and assessing performance at a Profit Center level, and not a Business Unit level.

b.The financial information included in the Business Units section of the Commercial and Industrial Performance Report only includes sales to unaffiliated third parties in the market(s) under the supervision of each Area Manager; as a result, such financial information excludes intercompany transactions as well as export sales to third parties and, therefore, does not represent the total volume produced in the Production Unit under the supervision of such Area Manager. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]

c.In addition, costs allocated to sales of any given Business Units only include standardized direct costs (such as raw materials, direct labor and energy) and do not include fixed expenses, which are separately attributed to each Production Unit (including, for example, amortization charges, extraordinary maintenance expenses and industrial fixed costs).

d.The exclusive purpose of the disaggregated information included in the Business Unit and Production Unit sections of the Commercial and Industrial Performance Reports is to analyze performance of certain variables used by the CODM and the Area Managers to monitor budget targets. Some of these variables are used to analyze performance of the Area Managers regarding their commercial (Business Units) and industrial (Production Units) responsibilities, and some of them only to review realized steel prices and actual cost of semifinished steel, raw materials and workforce, among others, and compare them to previously estimated sales prices and costs in the budget. Below are some of the main variables followed by the CODM:

◦Business Unit section:

•Shipments variation: the CODM evaluates actual shipment performance for each Area Manager in their respective Business Units.

•FOB price variation: the CODM checks differences between realized steel prices compared with those estimated in the budget.

•Raw material, labor and other inputs price variation: the CODM analyses the differences between actual prices for these inputs compared to standard costs used for budget purposes.

◦Production Unit section:

•Consumption variation: the CODM measures the efficiency of the facilities regarding the use of raw materials, workforce and other inputs in the production process compared to pre-defined physical consumption levels determined in the budget as standard costs.

The information on Commercial Results for each Business Unit included in the Commercial and Industrial Performance Report is not used and cannot be used by the CODM to allocate resources to each Business Unit because such information is incomplete. Furthermore, adding the Commercial Results line and the Total PU/Functional areas expenses line would yield a misleading result that is not and cannot be considered by the CODM to allocate resources.  [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]

The Company believes that the fact that it provides certain disaggregated information to the CODM, which does not provide a complete picture of performance and profitability (and that is not used and cannot be used by the CODM to allocate resources), does not on its own justify a conclusion that the regions constitute separate operating segments.  Further, the Company believes such incomplete information could be misleading to investors.  For the disaggregated information to be complete and represent an accurate picture of profitability of each region, the Company would need to prepare information that is currently not being prepared or used by the CODM.

2.   We note your response to our comment number 1. You state “upon further reflection and discussions with the Staff, the Company believes that it is more appropriate to state that the Company only has two operating segments—Mining and Steel, and that its regional operations do not qualify as operating segments under IFRS 8.” Expand your response to walk us through the material factors you considered in this apparent change to your identified operating segments. As part of your response, tell us why the previous disclosure differs from your current view. We further note the staff did not provide guidance on what would constitute the appropriate operating segments, based on your facts and circumstances, during our discussions.

R:        The purpose of the statement included in its previous response letter, and quoted by the Staff, is to make clear the Company’s view that it has two reportable operating segments, based on the reasons and arguments discussed during our videoconference and further elaborated in the Company’s previous response letter. The Company confirms to the Staff that the Company did not change its identified operating segments; rather, the Company is proposing to correct the explanation about operating segments included in the disclosure in the financial statements. The Company mistakenly described the four Business Units as operating segments.  The Company does not believe these four Business Units are operating segments as defined by IFRS 8.  Accordingly, the Company has proposed to correct this mistaken explanation in future filings.

3.We note from your proposed revisions to your segment footnote on page 2 of your response, that the CEO holds monthly meetings in which operating and financial performance information is reviewed, including financial information that differs from IFRS (with certain differences listed). However, the table below this narrative in your response appears to be consistent with the IFRS financial statements for the totals presented. Resolve this inconsistency for us. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]

R:        The Company advises the Staff that the reason for the inconsistency between (i) the amounts included in the Profit Center tables for cost of sales and EBIT/Operating income and (ii) the amounts included in the segment disclosure for the same period is attributable to the use of different cost methodologies (i.e., standardized direct costs compared to full cost), as described in our response to comment number 1 in our response letter dated November 2, 2022 .

The table included in the proposed revised financial statements reflects the Company’s interpretation of the Staff’s request to eliminate the reconciliation between the different cost methodologies: (i) based on management’s view, the use of direct cost methodology to calculate the inventories and of standardized costs based on previously internally defined cost estimates, and (ii) under IFRS, the use of full cost, including absorption of production overheads and depreciation, and historical cost (with the FIFO method).

Previously, management’s view and IFRS operating income were presented as follows:

4.We note the organization chart provided in your response to our comment number 2. As previously requested, identify and describe the role of each of your segment managers. Refer to IFRS 8 paragraph 9. Also, explain to us the role of the Global Planning Direction and how that position may interact with the Area Managers.

R:        The Company provides below information that the Company believes to be responsive to the Staff’s comments number 4, 5, 6 and 8:

I.Key operating decisions to run the business (and the persons responsible for them)

1.Steel segment

a.The CODM determines the optimal combination of activity/cost levels and product/market allocation to maximize profitability at the Steel segment level.

b.The Chief Planning Officer (Global Planning Direction, reporting to the CODM) makes decisions with impact on cross sales of steel products (produced in a Production Unit supervised by an Area Manager but sold to a third party through a Business Unit supervised by a different Area Manager) and on intercompany sales. In addition, the Chief Planning Officer determines slab sourcing origin for processing in the different Production Units (either produced in the same Production Unit, in a different Production Unit or purchased from a third party).

c.The Area Managers make decisions with impact on the operating and cost performance of their respective Production Units, on the sales of steel products in their respective Business Units, and on energy sourcing for their respective Production Units.

d.EXIROS, which is the Company’s affiliated purchasing agent, determines purchase volumes and optimizes purchase prices of iron ore, coking coal and other raw materials to feed all Production Units.

e.The Chief Technology Officer makes decisions related to R&D and quality assurance for The Company’s steel products.

2.Mining segment

a.The Mining Vice President makes decisions regarding iron ore mining and processing operations in Mexico, including reserves and resources estimations, mine life plans calculations, production costs management, community relations, safety and environmental issues, as well as management of iron ore sales to the Steel segment and third parties.

3.Global functions

a.The CODM makes decisions related to capital expenditures, like greenfield, brownfield and IT, as well as M&A transactions.

b.The Chief Industrial and Engineering Officer makes decisions regarding the coordination of operations, safety, environment and best industrial practices for all Production Units.

c.The Chief Financial Officer makes decisions related to debt/cash management, tax optimization and risk assessment and management, among others.

d.The Chief Information Officer (reporting to the CFO) makes decisions related to the performance and development of Ternium’s IT infrastructure.

e.The Chief Human Resources Officer makes decisions regarding optimal requirements of own and contracted personnel for all Production Units and functional departments.

II.Resource allocation by the CODM

The annual budget is the tool which the CODM uses to allocate resources to the business of the Steel and Mining segments and against which the CODM measures the Company’s performance.

The Global Planning Direction is the area in charge of coordinating and consolidating the information to prepare the Company’s annual budget, as well as setting the assumptions that are used by all areas (including prices of steel, raw materials and energy, exchange rates, inflation rates and economic growth rates).

The role of the Area Managers with respect to the annual budget relates specifically to the expected performance of the Production Unit and Business Unit under their responsibility. Area Managers are ultimately responsible for determining target sales volumes and prices for the Business Unit under their supervision. Area Managers do not determine intercompany transfers or export sales of products produced by the Production Units under their supervision, as these are determined by the Global Planning Direction. In addition, Area Managers determine target production volumes and costs for their Production Units, taking into consideration the raw material and energy cost assumptions provided by the Global Planning Direction and the operating rates and yields expected by their Industrial Operations Vice Presidents. Consequently,      Area Managers cannot be considered as segment managers according to paragraph 9 of IFRS 8, because, as explained in the Company’s response to comment 1, the scope of their responsibilities in the respective geographical regions does not reach a sufficient level of accountability to be considered a segment manager.

The Company notes that the budgeted production volumes in a Production Unit under the supervision of an Area Manager will not necessarily be in line with the expected sales volumes in his/her Business Unit, as a portion of the steel production in such Production Unit could be sold to third parties by other Business Units and/or sold through intercompany transactions to other Production Units for further processing. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]

The budget for sales in each region is based on the sales opportunities identified by the Commercial Vice President of each Business Unit under the supervision of a specific Area Manager. These sales may correspond to products manufactured in the Production Unit under the supervision of the same Area Manager or in a different Production Unit. This combination of sources is coordinated by the Global Planning Direction and any steel intercompany sales are made on arm’s length terms. As a result, the budgeted cost for each Business Unit may represent a combination of the production cost attributed to t