Mining, Steel, Pulp & Paper - LatAm: 2Q26 cost pressures cap sequential commodity price improvement

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Mining, Steel, Pulp & Paper - LatAm: 2Q26 cost pressures cap sequential commodity price improvement

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Mining, Steel, Pulp & Paper - LatAm

2Q26 cost pressures cap sequential

commodity price improvement

Price Objective Change

Ternium, GMEX, GGBR and Dexco to stand out this Q 13 July 2026

We expect the 2Q26 earnings season to reflect higher commodity prices q/q and Equity

stronger volumes, although higher costs should offset part of the improvement. Iron ore Latin America

producers should benefit from stronger shipments, while steelmakers should benefit Mining, Steel, Pulp & Paper

from price recovery. Base metals miners should capture the upside from higher copper Caio Ribeiro >>

prices, and pulp and paper results should improve sequentially on better pulp prices. Our Research Analyst

preferred stocks heading into the earnings season are Ternium (Buy), GMEX (Buy), Merrill+55 11Lynch2188-4375(Brazil)

Gerdau (Buy) and Dexco (Buy). Exhibit 1 shows our new POs, derived from the estimates caio.ribeiro@bofa.com

shown in Exhibits Exhibit 4-Exhibit 6 and partly driven by updated commodity price Guilherme Rosito >>

Research Analyst

assumptions (link to metals prices update). Merrill Lynch (Brazil)

+55 11 2188 4363

Iron ore: stronger volumes offset by higher freight costs guilherme.rosito@bofa.com

Mariana Leite >>

Iron ore producers should see stronger volumes q/q, although higher freight costs should Research Analyst

act as a headwind this quarter. Vale (Buy) should report EBITDA broadly stable q/q, as Merrill Lynch (Brazil)

+55 11 2188 4073

higher iron ore shipments are largely offset by higher cash costs and weaker price mariana.leite@bofa.com

realization. For CMIN (Underperform), stronger volumes should be more than offset by George L. Staphos