Brazilian integrated steelmaker Gerdau in a presentation to analysts unveiled a positive outlook for its businesses in South America. According to a company’s, the outlook for its mills in Peru, Argentina and Uruguay remains positive.

In Peru, where it owns Siderperu, Gerdau sees a positive performance for the domestic steel market, with a strong demand coming from the local civil construction industry. Sipar Gerdau Inversiones SA in Argentina, Gerdau sees the continuity of what it labeled as the good levels of activity in the civil construction and agriculture sectors. It also expects steel output to normalize. In Uruguay, Gerdau sees a similar trend with the continuity of the good levels of activity in the civil construction sector, fueled mainly by the infrastructure segment.

In addition, Gerdau has been working at full capacity to serve customers in Brazil and increase steel inventories amid an energy crisis that puts the country at risk of rationing and blackout. Gerdau said "This is a point of attention and we are closely monitoring how it will play out. But it is important to understand that this crisis is more severe in the Southeast, and this is important because we have production facilities across the country, which gives us more flexibility to shift production, as we did in the previous crisis. With a larger steel inventory, Gerdau will be able to serve customers at the end of this year and at the beginning of 2022, if the situation worsens.”

Brazil's Mines and Energy Minister Bento Albuquerque has warned that the country's energy crisis is worse than previously thought, as a record drought hampers hydropower generation, the largest source of energy in Brazil. Water reserves at hydropower plants are already at their lowest level in 91 years of records.

Gerdau Ready for Power Crisis amid Positive South American Outlook

Strategic Research Institute

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