Panic in financial markets isn't yet hitting Gerdau SA's steel sales, but a slowdown in steel demand growth could occur next year as clients adopt a wait and see approach amid economic uncertainty.

Mr Andre Gerdau Johannpeter CEO of Gerdau said that "We don't know yet how the financial panic, the volatility, will impact the real economy next year, but clients are waiting before rebuilding inventories."

He noted that the figures have not been revised in recent weeks despite global market turbulence.

He said that "We expect the global steel market to continue to grow in 2012 but we're cautious on the world outlook."

He, citing Worldsteel Association data, said that emerging countries should account for around 73% of total global steel consumption next year. However, monetary restrictions in emerging nations tend to make it difficult to see the true impact of the slowdown in global steel demand growth.

Mr Osvaldo Schirmer EVP finances at Gerdau said that Gerdau plans to use its expanded cash position following a share issue which raised BRL 3.6 billion in April to invest in existing projects but not to make acquisitions. He added that "This is a time for investment but not for acquisitions."

The Gerdau directors said that the company will maintain a previously announced BRL 10.8 billion investment program for the 2011-2015 period, the bulk of which will be spent in Brazil.

(Sourced from www.marketwatch.com)