Gerdau enjoys steel sector rebound

Gerdau S.A., a Brazil-based steelmaker with scrap-fed electric arc furnace (EAF) steel mills in several nations in the Americas, shipped 25 percent more steel in the first half of this year compared with the first half of 2020. The company’s output of crude steel grew by 17 percent.

Gerdau cites “the scenario of strong demand for steel in all countries where the company operates, combined with the ability of the teams in seizing the opportunities arising in the market” for its increases in output and profitability this year.

In the second quarter of this year, Gerdau says its adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) and its adjusted EBITDA margin “set all-time highs for a single quarter.”

Crude steel production staged “a robust recovery in relation to the second quarter of 2020,” the company adds, “since that quarter was affected by production stoppages at the company’s mills in 2020 due to COVID-19 and the associated impacts on the business.”

Across its EAF operations in several nations, including Brazil, Colombia, Mexico and the United States, Gerdau says it reached a production capacity utilization rate of around 80 percent, “which represents the highest level since 2018 and signals healthy demand in [our] main operations.”

Net sales in the second quarter of 2021 were higher than in the prior quarter and compared with the year-ago quarter.

Acknowledging higher overall ferrous scrap prices, the firm adds, “The accelerating increase in raw material costs over the last few months was offset by higher sales.”

Gerdau says the price it paid for scrap in the second quarter of 2021 rose by 75 percent compared with the same time frame last year. However, that was less drastic than the 197 percent increase in iron ore costs it experienced year on year.