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Gerdau Will Invest R$ 550 Million to Expand Special Steel Production Capacity at the Pindamonhangaba Plant, Announced This Thursday Morning by the President of the Steel Company, Gustavo Werneck. “
With the investment, Gerdau will raise its special steel production capacity at the São Paulo plant from 600,000 tons to 1 million tons per year. “At the same time, it prepares Gerdau to be a leader in the transformation of the Brazilian automotive industry”, said Werneck. It is a confirmation that Brazil will return to growth. It is the first sign we give of confidence in the Brazilian economy”, said the executive, during a meeting with analysts and investors in São Paulo.
Perspectives
Gerdau sees “significant” growth in 2019, especially in the regions that are among the priorities for the steelmaker, said Werneck. For global Gross Domestic Product (GDP), the forecast is growth of 3.6%, with expansion between 2.3% and 2.4% in Brazil, according to market estimates, the executive noted. He stated, “China will continue to grow, but there are concerns about sustainability, our view is that China will grow 6.18% next year.” In the United States, based on estimates from the World Steel Association (Worldsteel), the forecast is for a 1.3% growth in steel consumption next year. In Brazil, the Brazilian Steel Institute (IABr) currently forecasts a 6% growth in steel consumption. “At this moment we are discussing what the growth estimate for 2019 will be. We are quite optimistic,” commented Werneck.
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Some consuming segments are expected to show reaction as early as the beginning of the year, while others should accelerate in the second half. ” We see a positive 2019, which will help us at this moment as we conclude the divestment stage. We believe that in the segments and regions where Gerdau remains, growth will be significant and will help in the evolution of results and profitability starting in 2019″, added Werneck.
Gerdau expects that the steel market in the United States will continue to profit in 2019 from the situation created by the steel import tariffs imposed by the government of Donald Trump this year. “In North America, we had the best spread in years this year and next year the spread should remain high,” said Gerdau’s CEO, Gustavo Werneck. He referred to the difference between the price of scrap, the raw material for steel production, and the price of steel sold by steelmakers.
In 2018, after the imposition of steel import tariffs, which limited the product’s supply in the U.S., the metals spread in the country increased by over 40%, according to the company’s presentation. According to Werneck, the Trump administration is expected to maintain its protectionist policy in 2019, decided under the argument of ensuring national security, which has been contested by various nations around the world and will be the focus of panels at the World Trade Organization (WTO). The recent sale of the rebar operation in the U.S. is expected to help the company increase its margins in the coming months.
The news of the million-dollar investment from the multinational Gerdau fills us with hope for the resumption of hiring and job creation in 2019, may there be more investments like this! CHECK IT OUT, ELETROBRÁS STOCKS SOARED WITH PRIVATIZATION PROSPECTS
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