Gerdau says North America a bright spot

Global shipments from Brazil-based steel producer Gerdau S.A. rose by 11.5 percent in this year’s first quarter compared with the prior quarter, and Gerdau singled out its North America operating region for a 29.1 percent quarter-on-quarter rise in earnings before interest, taxes, depreciation and amortization (EBITDA).

The company, which makes its steel in North America via the scrap-fed electric arc furnace (EAF) method, had net income of 4.3 billion Brazilian reals ($862 million) worldwide in this year’s first quarter.

In a note to investors accompanying its earnings report, Gerdau says its first quarter 2023 results in North America demonstrate the market’s resilience. “We have observed that the demand for steel has been positively influenced by the level of activity in the construction industry, which should grow [more than] 6 percent in 2023, according to external estimates," the company says.

Gerdau also points to infrastructure projects and “industrial, sanitation, renewable energy and oil and gas sectors [that] remain at healthy levels, with increased production and sale volumes.”

“Even at their early stages, the governmental packages have been stimulating consumption (reshoring, infrastructure) in a scenario of consolidated supply and protection against imports," Gerdau says of conditions in the U.S.

The nearly 3 million metric tons of steel Gerdau shipped in the first quarter—while an 11.5 percent increase from the prior quarter—is nonetheless down by 2.5 percent compared with the first quarter of last year.

Gerdau says the interim period has included a complex global macroeconomic scenario marked by “external issues, such as a possible global recession, the continuation of the conflict between Russia and Ukraine, inflation and interest rates at high levels, and financial market stress due to credit crunch.”