Steel imports could wipe out Brazil’s industry, warns Gerdau CEO

The high level of steel imports into Brazil could undermine the country’s domestic industry, warned Gerdau’s CEO in Brazil, Gustavo Werneck, on Friday (31). According to the executive, many companies are already operating at a loss and will not be able to sustain themselves for much longer if the federal government fails to act. Despite the challenges, prospects for next year remain positive.

Werneck said steelmakers cannot operate “in the red” much longer and are losing momentum, putting the continuity of operations in Brazil at risk. “If there is no significant reduction in the inflow of imported products into Brazil, it will be impossible for domestic steelmakers to survive. They could disappear,” he warned.

For Gerdau, Werneck said that performance in North America remains the company’s main growth driver, supported by resilient local demand.

“The reduction of imports in North America — a direct result of the protective measures adopted during the Donald Trump administration — led our total volumes to grow both quarter over quarter and year over year, with an increase of more than 10%. The North America segment also reached a record share in our results, accounting for 65% of consolidated EBITDA during the period,” he explained.

In Brazil, however, the market remains heavily affected by the surge in imported steel. “Import penetration remains above 6 million tonnes in 2025, equivalent to nearly 30% of domestic sales, underscoring the urgent need for effective trade defense measures to protect Brazil’s steel industry and local jobs,” he added.

The high level of steel imports has already led Gerdau to lay off 1,500 workers in Brazil between January and July this year and to close plants in Barão de Cocais (Minas Gerais) and Mogi das Cruzes (São Paulo). The company has also announced a 22% reduction in planned investments for next year.

Werneck noted that the company decided to announce its investment cuts early out of respect for stakeholders and to make clear its concerns about the future of operations in Brazil.

“It makes no sense to maintain high levels of investment if we don’t have a fair competitive environment. We’re not trying to pressure the government — this is simply market reality. We only invest if there are clients,” he said.

Positive outlook for 2026
Despite current difficulties, Gerdau’s outlook for 2026 remains positive. Werneck said the federal government has shown greater awareness of the issue and is taking more concrete steps to support the domestic industry. The company’s CFO, Rafael Japur, shared this view: “There’s been technical progress on the matter. The government has been visiting companies, collecting data, and conducting deeper analyses to advance investigations — something that wasn’t happening before.”

Werneck said the ideal scenario would be one where competitive conditions are restored. “Antidumping measures should reduce import levels from 30% to around 10%. That would bring back fair and balanced competition, allowing companies like ours to resume investment,” he said.

Another factor driving optimism for 2026 is the expected growth of industrial sectors — particularly automotive — and stability in the construction industry.

Gerdau’s third-quarter results
In the third quarter, Gerdau reported an adjusted net profit of R$ 1.09 billion, up 26% from the previous quarter but down 23.9% from the same period in 2024.

Adjusted EBITDA reached R$ 2.7 billion, 6.9% higher than in the second quarter but 9.2% lower than in the same quarter of 2024. Steel sales totaled 3 million tonnes, up 9.3% from the previous quarter and 9% year on year. In Brazil, sales rose 16.6% from the second quarter, driven by higher exports and domestic demand.

Source: Diário do Comércio

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