CHICAGO Gerdau SA
provided a conservative yet positive outlook for North American
steel demand this year, citing two key end markets.
"The United States should
continue to present good demand, particularly in the sectors of
energy and automotive. With the increasing exploration in the
shale gas reserves, the industry expects to grow as the cost of
energy will become more competitive," chief financial officer
André Pires de Oliveira Dias said during the Porto
Alegre, Brazil-based steelmakers Feb. 21 earnings
"There is a slight improvement
in construction, but the figures are still below historical
numbers. For 2013, it is expected that (U.S. gross domestic
product) will grow by 2 percent. Steel consumption should
improve by 3.6 percent, reaching 100 million tons," Pires de
Oliveira Dias said.
Production of light and heavy
vehicles throughout the United States, Canada and Mexico
reflects "a warming-up of demand," and he projected additional
growth in automotive output this year.
For Gerdaus North American
operations, fourth-quarter production dropped 15 percent, but
the bulk of that was in merchant, rebar and structural
products. "In the U.S., when it comes to specialty steel
(special bar quality, or SBQ), the decrease was only 3
percent," he told investors.
"What we see is that this is an
industry that is still very strong. We are still producing
close to 90 percent of our (SBQ steelmaking) capacity in North
America," Pires de Oliveira Dias said.
As demand eventually rebounds,
Gerdaus North American capacity across all long products
mills will rise to the 80- to 85-percent range, he