Gerdau to expand specialty steels capacity in Brazil

Gerdau will expand its specialty steel operations in Brazil during 2021 and 2022 through investments of Real 1 billion ($180 million), betting mainly on the automotive industry, it said April 19.

The allocations will be made in the three units that the steelmaker maintains in the country: Charqueadas, in the southern Rio Grande do Sul state, Mogi das Cruzes and Pindamonhangaba units, both in the southeastern Sao Paulo state.

Mogi das Cruzes will have its meltshop reactivated, after being idled since March 2019. It will operate with annual capacity of 180,000 mt of steel that will be rolled in Pindamonhangaba.

The largest share of investments will go to Pindamonhangaba for a new continuous caster. The new equipment is slated to be operational in August of 2022.

Last year, the steelmaker produced 661,000 mt of specialty steel in Brazil. The estimate for this year is 880,000 mt, which may reach 1 million mt when the plant is at full capacity.

In total, Gerdau’s specialty steel division produced 1.42 million mt in 2020, including its units in the US.

Despite the current low utilization of the 5 million mt/year installed capacity of car manufacturers in Brazil, which is currently at about 40%, Gerdau remains confident about the sector, but is also betting on improvements in the machinery, equipment and wind power segments. Currently, the automotive sector represents 70% of Gerdau’s sales of specialty steels.

— Adriana Carvalho