Published by:Ana Enis<>
29 Apr 2025 @ 21:59 UTC

Brazilian steelmaker Gerdau called on the federal government to implement more effective trade defense mechanisms, the company said during its earnings call on Tuesday April 29, as it evaluates future investment plans amid surging steel imports that continue to pressure domestic margins.

The quota-tariff system has not fulfilled its role, Gerdau chief executive officer Gustavo Werneck said. Gerdau is not looking for protection, but rather fair competition conditions.
While the company maintained its guidance for 6 billion Reais ($1.05 billion) in 2025 capital expenditure, Werneck warned that this level of investment may not be sustained from 2026 onwards unless the Brazilian government announces new trade remedies.
The current quota-tariff scheme completes one year in May, and Gerdau expects updates by then.
Amid these conditions, Gerdau canceled a planned investment in the automotive sector in Mexico. The decision reflects concerns over global tariff uncertainty and its structural impact on the special steel market.
Despite the domestic headwinds, Gerdau’s operations in North America drove stronger-than-expected results for the first quarter of 2025. The region contributed 1.2 billion Reais in earnings before interest, taxes, depreciation and amortization (EBITDA), up by 48% year on year.
This performance offset the weak domestic scenario and pushed total adjusted EBITDA to 2.4 billion Reais.
In the first quarter of 2025, we recorded growth in delivered volumes in North America, along with a backlog recovery to 70 days, above the historical level, Werneck said.
Chief financial officer Rafael Japur reaffirmed the resilience of the US order book, describing it as robust.
We have not seen a reduction in sales volumes, Japur said, despite some sector-specific concerns about ongoing trade policy discussions in the US. The strong North American showing came even as expectations rose for tighter US tariffs, which may have prompted restocking among local buyers.
Meanwhile, Gerdau’s Brazil division reported a 7% EBITDA miss, totaling 1 billion Reais, as costs rose during a scheduled shutdown at the Ouro Branco unit. Domestic prices and volumes were slightly above expectations, but margins remained under pressure.
Still, Gerdau reinforced its strategic focus in Brazil — particularly Minas Gerais — with a significant portion of its capex concentrated in the state.
Minas Gerais is a very important state for Gerdau and will continue to be, the CEO said. We are implementing a significant investment in sustainable mining, which will begin operating in January next year.
The company highlighted the expansion of its hot-rolled coil production in Ouro Branco, Minas Gerais, and the iron ore mine Miguel Burnier in Ouro Preto. The latter received IRMA 50 certification from the Initiative for Responsible Mining Assurance, placing it among just 11 mines worldwide with the designation.
This expansion in HRC production increases the share of flat steel in our portfolio in Brazil, allowing Gerdau to offer a broader range of high-value-added products, Werneck said.
During the quarter, Gerdau invested 1.4 billion Reais, with 60% allocated to growth and technology projects. The Ouro Branco expansion alone is expected to generate an EBITDA boost of 400 million Reais per year under fair market conditions, according to Japur.
The company also advanced its share buyback program and continues to prioritize capital efficiency.
Net revenue for the first quarter reached 17.4 billion Reais, with physical steel shipments totaling 2.9 million tonnes. Net income came in at 758 million Reais, up by 14% from the fourth quarter but down by 36% year on year, reflecting last year’s stronger baseline.
Even under what it described as an environment of oversupply and price pressure, Gerdau emphasized its readiness to adapt. With its 124-year history, Gerdau is prepared to navigate volatile macroeconomic scenarios, ensuring value creation for its stakeholders, Werneck said.