Imports keep steel prices down in Brazil: Gerdau
Brazilian steel producer Gerdau expects margins to remain low in the fourth quarter due to rising volumes of cheaper imported steel.
Additional price increases are needed to ease pressure on margins, but import competition has so far hindered this, chief executive Gustavo Werneck said.
Since October 1, the company has increased prices for hot-rolled coils (HRC) by 8%. A reduction in the share of imports in the domestic market and rising prices for raw materials have prompted Brazilian factories to raise prices.
"In Brazil, several factories are operating at a loss. The domestic steel industry will collapse if the influx of imports remains as strong," Werneck said during a conference call on October 31.
Werneck expressed confidence that more reliable mechanisms will be implemented in the coming months to compensate for recent losses.
President Lula da Silva said the Silva administration is working to find a balance between supporting domestic industry and maintaining relations with China, Brazil's main trading partner.
Zherdau expects that the anti-dumping duties will create a level playing field in Brazil. China's Human Rights Commission is under intense scrutiny. The anti-dumping investigation covers 25 products, which are expected to be resolved in April-October 2026. Most of Gerdau's products are rolled products, but the company has recently invested in expanding its HRC production capacity by 250,000 tons per year. The Oro Branco plant began increasing capacity earlier this year.
Since then, the company has scaled back its investment plans in Brazil and laid off more than 1,000 employees in 2025. Constant cost overruns at several plants forced Gerdau to reduce opening hours, the company said in a statement.
The steel mill operates in North America, Brazil and three other South American countries. Increased protective measures in the United States led to increased sales and total revenue of Gerdau, the report said.
Quarterly steel production in Gerdau increased by 6% to 3.15 million metric tons in the third quarter compared to the same period last year. Sales in all three regions increased to 3 million tons from 2.82 million tons a year earlier.
Steel production in Brazil at the Gerdau plant remained unchanged at 1.64 million tons, while sales in Brazil increased by 8% to 1.58 million tons compared to the previous year. Brazil's exports rose to 330,000 tons, up 29.5% from a year earlier.
Businesses in South America, including Argentina, Peru, and Uruguay, produced 164,000 tons in the quarter, up 39% from a year earlier.
Production increased due to the gradual recovery of sales volumes in Argentina and Uruguay,