Gerdau Raises Output in US, Cuts Back in Brazil Amid Steel Market Shifts

North America Drives EBITDA Growth as Brazil Struggles

Gerdau S/A, the leading Brazilian steelmaker, reported a 6.6% quarter-over-quarter EBITDA increase for Q2 2025, supported largely by its operations in the United States. Despite this gain, year-over-year earnings dipped by 2.4% compared to Q2 2024. The company attributed the mixed results to a surge in North American steel output and a decline in Brazilian production, highlighting the value of its global diversification strategy.

From April through June 2025, Gerdau’s North American segment contributed 61% of consolidated EBITDA, largely compensating for weakened results in Brazil and South America. U.S. steel mills, powered by electric arc furnace (EAF) technology, increased output by 12.3% compared to the same period last year. Meanwhile, Brazilian production fell 2.1%, reflecting domestic challenges and export pressures.

A key driver of U.S. growth was a reduction in steel imports following the reinforcement of Section 232 tariffs under President Donald Trump. With domestic buyers favoring local steel, order backlogs reached an average of 75 days, signaling strong demand and capacity strain within U.S. operations.

Gerdau Navigates Trade Barriers and Competitive Pressures in Brazil

Despite the strength in North America, Gerdau faces headwinds in Brazil. The domestic steel sector continues to suffer from a high volume of unfairly priced steel imports, which has significantly eroded local competitiveness. The company noted that the loss of the U.S. export market—exacerbated by tariff barriers—compounds these challenges.

Gustavo Werneck, Gerdau’s CEO, stressed the urgent need for improved trade defense policies in Brazil. He highlighted that Gerdau’s resilience stems from its ability to adapt to diverse global markets, but also emphasized that a sustainable future requires fair conditions within its home market. “We remain ready for global volatility,” Werneck said, “but Brazil must create a level playing field for local producers.”

As the macroeconomic environment grows more uncertain, Gerdau’s performance underlines the importance of geographical flexibility. The company’s strategy to invest in high-performing regions like the U.S. has offset stagnation in markets where policy and trade issues persist.

SuperMetalPrice Commentary:

Gerdau’s Q2 2025 results reinforce a growing trend in the global steel industry: regional protectionism is reshaping supply chains and competitiveness. The U.S. market, buoyed by reinforced Section 232 tariffs, has become a critical growth engine for companies like Gerdau. In contrast, Brazil’s lack of effective import controls threatens long-term industrial viability. Investors and industry watchers should monitor how Gerdau adjusts capital allocation and lobbying efforts in response to these divergent policy landscapes. Expect further output expansion in North America and continued calls for trade reform in Brazil.