Brazil’s largest steelmaker, Gerdau, expects to export 30 percent of its output in Brazil in 2016, as the company has seen a diminished demand for steel in the domestic market.
Talking to analysts and investors this week during the company’s Q1 conference call, Gerdau’s CEO, André Gerdau Johannpeter, said the improvement in steel prices in the global market should help the company improve revenues in Q2.
The company’s steel shipments in May in the export market are already benefiting from such a trend. Johannpeter said margins for steel exports should also improve.
Gerdau is also analyzing the possibility of exporting iron ore in the export market, as the commodity’s prices have improved in the past few months. Declining port infrastructure costs and cheaper freight could help Gerdau realize those sales in the export market.
A look at Gerdau’s combined revenues from its business units in the past twelve months reinforce the company’s on-going move to expand the revenue share it has in the export market.
According to Gerdau, in the past 12 months, Brazil accounted for 27.9 percent of the company’s total revenues, while the North American business accounted for another 40 percent share. South America and the specialty steel units accounted for the remaining 12.2 and 19.9 percent revenue shares, respectively, in the same period. In the US, revenues in Q1 rose to BRL 4.2 billion in Q1, from BRL 3.8 billion in the same quarter of the year prior.