Gerdau capex plans include Texas EAF expansion

Brazil-based steelmaker Gerdau S.A. has announced an update its capital expenditure plans for 2026 that involves suspending earlier plans in Brazilian production while moving forward with capacity expansion at the firms’ recycled-content electric arc furnace (EAF) mill in Midlothian, Texas.

The majority of the capex spending put on hold in Brazil involved an earlier announced plan to expand rolling mill capacity at a facility in there.

The company, in a presentation made at an event for investors earlier this week, says it will continue to spend in Brazil on an iron ore mining project and for a metals recycling project in Pindamonhangaba, Brazil.

Gerdau will continue to invest in the United States next year, predominantly with a $51.5 million project that will expand capacity at the Midlothian EAF mill in the second half of 2026.

In the same presentation, Gerdau says Brazil currently presents moderate growth prospects for the segments in which we operate.

The steelmaker cites in part a lack of competitive isonomy and ineffective trade defense measures in the nation, predicting that steel imports could reach an all-time high in the Brazilian market for the second consecutive year in 2025.

Gerdau describes the U.S. as having enacted tariffs with “no exclusions or quotas,” saying its mills in the U.S. have captured additional business because of the decline in imports.

The company says it has a strong business foundation to serve North America, listing its Midlothian EAF mills along with those in: Cartersville, Georgia; Monroe, Michigan; Jackson, Tennessee; Petersburg, Virginia; and Whitby, Ontario, Canada.

The firm’s willingness to invest in the U.S. has been spelled out in comments made accompanying earnings reports issued earlier this year.

A Bloomberg report from earlier this week quotes Gerdau CEO Gustavo Werneck as pointing to China as a culprit in steel import influxes witnessed in Brazil.

“The biggest player in the Brazilian steel market is currently Chinese steel, subsidized and unfairly competitive,” Werneck said says in the report. “We cannot sit idly by and wait for our strategy in Brazil to be based on trade defense."