Ternium (NYSE:TX) Desirable Only on Steel Price Bounce Says Barclays (NYSE:BCS)

With little effect from global steel prices in Brazil at this time, Barclays (NYSE:BCS) said they wouldn't buy Ternium (NYSE:TX) unless it was on a steel price bounce.

Barclays said, "TX is the most leveraged steel maker in our coverage universe to the recovery in global steel prices, with an EBITDA exposure to North America of approximately 55-60% (mainly spot based contracts). As a result of the unfavorable domestic inventory trends (I/S ratio at 4-months), Brazilian steel pricing dynamics should remain fairly insulated from global movements...We maintain our call that the Brazilian steel sector should bottom in 1Q11 (not in the 4Q10) and that the destocking cycle should only end by 2Q11. We reiterate our preference for non-Brazil steel exposure and would be buyers of Ternium into the bounce in steel prices."

Barclays reiterates their "Overweight" on Ternium, which closed Tuesday at $38.12, up $0.07, or 0.18 percent. They have a price target of $45 on them.