<SEC-DOCUMENT>0001193125-14-255771.txt : 20150724
<SEC-HEADER>0001193125-14-255771.hdr.sgml : 20150724
<ACCEPTANCE-DATETIME>20140630162153
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001193125-14-255771
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		3
FILED AS OF DATE:		20140630

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Ternium S.A.
		CENTRAL INDEX KEY:			0001342874
		STANDARD INDUSTRIAL CLASSIFICATION:	STEEL WORKS, BLAST FURNACES  ROLLING MILLS (COKE OVENS) [3312]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			N4
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		29 AVENUE DE LA PORTE-NEUVE
		STREET 2:		3RD FLOOR
		CITY:			LUXEMBOURG
		STATE:			N4
		ZIP:			L-2227
		BUSINESS PHONE:		(352) 4661-11-3815

	MAIL ADDRESS:	
		STREET 1:		29 AVENUE DE LA PORTE-NEUVE
		STREET 2:		3RD FLOOR
		CITY:			LUXEMBOURG
		STATE:			N4
		ZIP:			L-2227
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">TERNIUM S.A.</TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">Soci&eacute;t&eacute; anonyme holding</TD></TR>
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<TD VALIGN="bottom">Registered office:</TD></TR>
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<TD VALIGN="bottom">29, Avenue de la Porte-Neuve</TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom">L-2227 Luxembourg</TD></TR>
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<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">R.C.S. Luxembourg B 98 668</P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">www.ternium.com</P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:10pt; font-family:Times New Roman">June&nbsp;30, 2014</P></TD></TR>
</TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Mr.&nbsp;Terence O&#146;Brien, </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Accounting Branch Chief, </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Division of Corporation Finance, </P>
<P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Securities and Exchange Commission, </P> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">100 F Street, N.E.,
Washington, D.C. 20549-4631. </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="13%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>Re:</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Ternium S.A. </B></TD></TR></TABLE>
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<TD WIDTH="13%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>December&nbsp;31, 2013 Form 20-F filed April&nbsp;30, 2014 </B></TD></TR></TABLE>
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<TD WIDTH="13%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>&nbsp;</B></TD>
<TD ALIGN="left" VALIGN="top"><B>File No.&nbsp;1-32734 </B></TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman">Dear Mr.&nbsp;O&#146; Brien: </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">Set out below are the responses of Ternium S.A. (&#147;<U>Ternium</U>&#148; or the &#147;<U>Company</U>&#148;), to the comments of the Staff
of the United States Securities and Exchange Commission (the &#147;<U>Staff</U>&#148;) set forth in its letter dated June&nbsp;16, 2014, to Mr.&nbsp;Pablo Brizzio, the Company&#146;s Chief Financial Officer (the &#147;<U>Comment Letter</U>&#148;).
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:4%; font-size:10pt; font-family:Times New Roman">The responses below are keyed to the headings indicated in the Staff&#146;s comments and are designated with the letter &#147;R&#148;
below the comment number. The comments themselves are set forth in boldface type. Unless otherwise indicated, all page references are to the corresponding page in the Company&#146;s Consolidated Financial Statements incorporated to the
Company&#146;s annual report on Form 20-F for the fiscal year ended December&nbsp;31, 2013 (the &#147;<U>Form 20-F</U>&#148;). </P> <P STYLE="margin-top:18pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman"><U>Note 14 &#150; Page
F-46 </U></P> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>1.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>We understand that the carrying value of your equity investment in Usiminas was $1.37 billion on December&nbsp;31, 2013. The disclosure on page F-16 describes the material impairment you recognized on this asset in
2012. If you own 115&nbsp;million Usiminas common shares, and the quoted price of these shares (USNZY) on December&nbsp;31, 2013 was $6.02/share, then it appears that the fair value of your equity investment was only $692 million. Subsequently, the
quoted price has declined further to $4.40/share and $3.60/share at March&nbsp;31, 2014 and June&nbsp;16, 2014, respectively. Please tell us whether you performed an impairment test on the equity investment at December&nbsp;31, 2013, and at
March&nbsp;31, 2014, and explain to us how you determined that an additional impairment charge was not required at either of those dates. In this regard, paragraph 61 of IAS 39 states that a significant or prolonged decline in the fair value of an
investment in an equity instrument below its cost is an objective evidence of impairment. Please quantify and support any material assumptions used in estimating the recoverable amount. Please provide any December&nbsp;31, 2013, and March&nbsp;31,
2014, value in use calculations and tell us the actual cash flow derived from the asset in 2013. Please correlate any value in use calculations with the requirements outlined in paragraphs 30-57 of IAS 36. </B></TD></TR></TABLE>

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<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">R:</TD>
<TD ALIGN="left" VALIGN="top">As disclosed in the 2013 Financial Statements, on January&nbsp;16, 2012, Ternium closed the acquisition of 114.7&nbsp;million ordinary shares (the &#147;Control Group Shares&#148;) from Camargo Corr&ecirc;a, Votorantim
and Previd&ecirc;ncia Usiminas (Usiminas&#146; employee pension fund, formerly known as Caixa dos Empregados da Usiminas). </TD></TR></TABLE>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Control Group Shares were acquired at a price of BRL 36.0, or approximately USD19.0, per ordinary share (USIM3). The trading price of
Usiminas&#146; ordinary shares on November&nbsp;25, 2011, one day before the announcement of the transaction (was significantly lower (BRL 19.7, or approximately USD10.4, per ordinary share). The price paid by Ternium for the Control Group Shares
was higher than the trading price of Usiminas&#146; other ordinary shares for several reasons. The Control Group Shares give the owner of such shares the right to participate in Usiminas&#146; pre-existing control group<SUP
STYLE="font-size:85%; vertical-align:top">1</SUP> (with all the rights and obligations associated with the foregoing)<SUP STYLE="font-size:85%; vertical-align:top">2</SUP> and, as a result, have strategic value; by contrast, Usiminas&#146; other
ordinary shares are held by minority shareholders outside the control group and are traded in the Brazilian stock exchange, although trading volumes are low (on average, less than USD2 million per
day).<SUP STYLE="font-size:85%; vertical-align:top">3</SUP> </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">As disclosed in the 2013 Financial Statements, Ternium accounts for its
participation in Usiminas using the equity method. We note that the carrying amount of the Usiminas equity investment has decreased over time, as shown in the table below: </P> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD></TD>
<TD></TD>
<TD></TD>
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<TD></TD>
<TD></TD>
<TD></TD></TR>
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<TD VALIGN="bottom"><B>Value of investment (millions of USD)</B></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"><B>As&nbsp;of&nbsp;December&nbsp;<BR>31, 2013</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" COLSPAN="2" ALIGN="center"> <P STYLE="margin-top:0pt; margin-bottom:0pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>As&nbsp;of&nbsp;December</B></P>
<P STYLE="margin-top:0pt; margin-bottom:1pt; font-size:8pt; font-family:Times New Roman" ALIGN="center"><B>31, 2012</B></P></TD>
<TD VALIGN="bottom">&nbsp;</TD></TR>


<TR BGCOLOR="#cceeff" STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"><B>At the beginning of the year</B></P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"><B>&nbsp;</B></TD>
<TD VALIGN="bottom" ALIGN="right"><B>1,592.3</B></TD>
<TD NOWRAP VALIGN="bottom"><B>&nbsp;&nbsp;</B></TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD NOWRAP VALIGN="bottom"><B>&nbsp;</B></TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right"><B>&#151;&nbsp;&nbsp;</B></TD>
<TD NOWRAP VALIGN="bottom"><B>&nbsp;&nbsp;</B></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Acquisition of participation</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">&#151;&nbsp;&nbsp;</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">2,243.6</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff" STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Dividends received</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">&#151;&nbsp;&nbsp;</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">(4.7</TD>
<TD NOWRAP VALIGN="bottom">)&nbsp;</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Share of results</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">(35.3</TD>
<TD NOWRAP VALIGN="bottom">)&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">(88.6</TD>
<TD NOWRAP VALIGN="bottom">)&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff" STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Other comprehensive income</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">(187.3</TD>
<TD NOWRAP VALIGN="bottom">)&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">(282.7</TD>
<TD NOWRAP VALIGN="bottom">)&nbsp;</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-left:3.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman">Impairment charge</P></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;</TD>
<TD NOWRAP VALIGN="bottom" ALIGN="right">&#151;&nbsp;&nbsp;</TD>
<TD NOWRAP VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom" ALIGN="right">(275.3</TD>
<TD NOWRAP VALIGN="bottom">)&nbsp;</TD></TR>
<TR STYLE="font-size:1px; ">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1.00px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1.00px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1.00px solid #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:1.00px solid #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD></TR>
<TR BGCOLOR="#cceeff" STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em; font-size:10pt; font-family:Times New Roman"><B>At the end of the year</B></P></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"><B>&nbsp;</B></TD>
<TD VALIGN="bottom" ALIGN="right"><B>1,369.8</B></TD>
<TD NOWRAP VALIGN="bottom"><B>&nbsp;&nbsp;</B></TD>
<TD VALIGN="bottom"><FONT STYLE="font-size:8pt">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><B>&nbsp;</B></TD>
<TD VALIGN="bottom" ALIGN="right"><B>1,592.3</B></TD>
<TD NOWRAP VALIGN="bottom"><B>&nbsp;&nbsp;</B></TD></TR>
<TR STYLE="font-size:1px; ">
<TD VALIGN="bottom"></TD>
<TD VALIGN="bottom">&nbsp;&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3.00px double #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3.00px double #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD>
<TD VALIGN="bottom">&nbsp;</TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3.00px double #000000">&nbsp;</P></TD>
<TD VALIGN="bottom"> <P STYLE="border-top:3.00px double #000000">&nbsp;</P></TD>
<TD>&nbsp;</TD></TR>
</TABLE> <P STYLE="line-height:8.0pt;margin-top:0pt;margin-bottom:2pt;border-bottom:1px solid #000000;width:10%">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><SUP STYLE="font-size:85%; vertical-align:top">1</SUP>&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Usiminas&#146; control group, which holds, in the aggregate, 322.7&nbsp;million ordinary shares, representing approximately 63.9% of Usiminas&#146; voting capital, is formed as follows: Nippon Group (comprising Nippon
Steel&nbsp;&amp; Sumitomo, Mitsubishi and Metal One), which holds approximately 46.1% of the total shares held by the control group; Ternium/Tenaris Group (comprising Ternium Investments, Siderar, Prosid and TenarisConfab), which holds approximately
43.3% (with 35.6% corresponding to Ternium and the remainder 7.7% corresponding to Tenaris) of the total shares held by the control group; and Previd&ecirc;ncia Usiminas, which holds the remaining 10.6%. </TD></TR></TABLE>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><SUP STYLE="font-size:85%; vertical-align:top">2</SUP>&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">The rights of the members of Usiminas&#146; control group are governed by a shareholders&#146; agreement. Under such agreement, so long as the Nippon Group and Ternium/Tenaris Group each hold at least 25% of the total
shares held by the control group, the Nippon Group and the Ternium/Tenaris Group shall, in the aggregate, nominate a majority of the members of the Usiminas&#146; board of directors, with each such group nominating an equal number of directors.
Usiminas&#146; shareholders&#146; agreement further provides that the Nippon Group and the Ternium/Tenaris Group shall nominate, by consensus, the chairman of Usiminas&#146; board of directors and Usiminas&#146; chief executive officer
(<I>diretor-presidente</I>). Under Usiminas&#146; shareholders&#146; agreement, the Nippon Group, the Ternium/Tenaris Group and Previd&ecirc;ncia Usiminas are required to vote, and cause the Usiminas directors nominated by them to vote, as a single,
unified block. Any and all decisions to be adopted by the members of the control group at Usiminas&#146; shareholders&#146; meetings, or by the directors nominated by them at any of Usiminas&#146; board or directors&#146; meetings, shall require the
consensus of both the Nippon Group and the Ternium/Tenaris Group, with decisions on certain extraordinary matters requiring the unanimous consent of the Nippon Group, the Ternium/Tenaris Group and Previd&ecirc;ncia Usiminas. </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><SUP STYLE="font-size:85%; vertical-align:top">3</SUP>&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">On May&nbsp;15, 2012, MSCI announced that, as of May&nbsp;31, 2012, Usiminas ordinary shares would be removed from the MSCI Brazil index, presumably as a result of non-compliance with MSCI&#146;s minimum free
float-adjusted market capitalization threshold for that market. </TD></TR></TABLE>

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 <P STYLE="margin-top:0pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">The Company believes that the carrying amount of its Usiminas equity investment should not be
automatically written down to the current trading price of the Usiminas ordinary shares. The price decline is merely an indicator of impairment, which may or may not lead to impairment. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">IAS 36 requires that the recoverable amount using the &#145;value in use&#146; method should also be calculated before recording an impairment
loss. If the value in use is higher than the carrying amount of the investment, then there is no impairment. </P> <P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">Ternium assesses the
existence of an impairment or impairment reversal indicator at each reporting date. Accordingly, the Company updated the value in use calculation of its equity investment in Usiminas at December&nbsp;31, 2013, and concluded that no recognition of
additional impairment or reversal of impairment was required. The calculation of the value in use was performed following the guidance outlined in paragraphs 30-57 of IAS 36. In connection with its preparation, review and issuance of the interim
financial statements for the quarter ended March&nbsp;31, 2014, management concluded that no substantial changes from December&nbsp;31, 2013, had occurred and, as a result, no further calculations were performed. </P>
<P STYLE="margin-top:6pt; margin-bottom:0pt; margin-left:8%; font-size:10pt; font-family:Times New Roman">We note that, in response to the Staff&#146;s request, the Company has submitted under separate cover the following: (i)&nbsp;quantification
and support of material assumptions used in estimating the recoverable amount of the Usiminas equity investment, and (ii)&nbsp;value in use calculations at December&nbsp;31, 2013, and actual cash flows derived from the asset during the year then
ended. </P> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>2.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>Please tell us whether you expect any material changes in the carrying value of your Usiminas equity investment during the quarter ending June&nbsp;30, 2014. </B></TD></TR></TABLE>
<P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
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<TR>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">R:</TD>
<TD ALIGN="left" VALIGN="top">Ternium advises the Staff that, while it is not currently aware of the existence of any impairment or impairment reversal indicators on the carrying value of the Usiminas equity investment, it will assess the existence
of any impairment or impairment reversal indicators as part of its processes for the preparation, review and issuance of the Company&#146;s interim financial statements for the quarter ending June&nbsp;30, 2014, and that, if appropriate, it will
adjust the carrying amount of the Usiminas equity investment. </TD></TR></TABLE> <P STYLE="font-size:18pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>3.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>In future filings, please disclose the fair value of the Usiminas equity investment as required by IFRS 12.21(b)(iii). </B></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">R:</TD>
<TD ALIGN="left" VALIGN="top">The Company acknowledges the Staff&#146;s comment and confirms that in future filings it will disclose in its financial statements the fair value of the Usiminas equity investment as required by IFRS 12.21(b)(iii).
</TD></TR></TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">


 <P STYLE="margin-top:0pt;margin-bottom:0pt">


<IMG SRC="g749865img2.jpg" ALT="LOGO">
 </P> <p STYLE="margin-top:0pt;margin-bottom:0pt ; font-size:8pt">&nbsp;</P>

<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><B>4.</B></TD>
<TD ALIGN="left" VALIGN="top"><B>In future filings, please expand the risk factor disclosures on pages 11-12 to quantify the difference between the fair value and the carrying value of your Usiminas equity investment. Further, please identify all
known factors which materially impact the recoverability of this asset. </B></TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%">&nbsp;</TD>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">R:</TD>
<TD ALIGN="left" VALIGN="top">The Company acknowledges the Staff&#146;s comment and confirms that in future filings it will expand the risk factor disclosures to quantify the difference between the fair value and the carrying value of the Usiminas
equity investment, and will identify all known factors which materially impact the recoverability of this asset. </TD></TR></TABLE> <P STYLE="margin-top:12pt; margin-bottom:0pt; font-size:10pt; font-family:Times New Roman" ALIGN="center">* * * * *
</P> <P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">The Company acknowledges that it is responsible for the adequacy and accuracy of the disclosure in its filings. In addition, the Company
acknowledges that the Staff&#146;s comments or changes to the Company&#146;s disclosure in response to the Staff&#146;s comments do not foreclose the Commission from taking any action with respect to the Company&#146;s filings and that the Company
may not assert the Staff&#146;s comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. </P>
<P STYLE="margin-top:12pt; margin-bottom:0pt; text-indent:8%; font-size:10pt; font-family:Times New Roman">If you have any questions relating to this letter, please feel free to call Robert S. Risoleo of Sullivan&nbsp;&amp; Cromwell LLP at
(202)&nbsp;956-7510. He may also be reached by facsimile at (202)&nbsp;956-6974 and by <FONT STYLE="white-space:nowrap">e-mail</FONT> at risoleor@sullcrom.com. </P>
<P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P><DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt">


<TR>
<TD WIDTH="100%"></TD></TR>


<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Very truly yours,</TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top"> <P STYLE="margin-top:0pt; margin-bottom:1pt; border-bottom:1px solid #000000; font-size:10pt; font-family:Times New Roman">/s/ Pablo Brizzio</P></TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Pablo Brizzio</TD></TR>
<TR STYLE="font-family:Times New Roman; font-size:10pt">
<TD VALIGN="top">Chief Financial Officer</TD></TR>
</TABLE></DIV> <P STYLE="font-size:12pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">cc:</TD>
<TD ALIGN="left" VALIGN="top">Al Pavot </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">(Securities and Exchange Commission) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Mervyn Martins </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">(PricewaterhouseCoopers) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Cristian J. P. Mitrani </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">(Mitrani, Caballero, Ojam&nbsp;&amp; Ruiz Moreno Abogados) </TD></TR></TABLE> <P STYLE="font-size:6pt;margin-top:0pt;margin-bottom:0pt">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">Robert S. Risoleo </TD></TR></TABLE>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE; font-family:Times New Roman; font-size:10pt" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left">&nbsp;</TD>
<TD ALIGN="left" VALIGN="top">(Sullivan&nbsp;&amp; Cromwell LLP) </TD></TR></TABLE>
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