Gerdau 3Q25: North America Drives Earnings as Brazil Margins Compress

Solid U.S. performance offsets weaker Brazil results; liquidity and balance-sheet strength support resilience amid persistent domestic pricing pressure

We maintain our Neutral recommendation on Gerdau. The outlook for the company’s Brazilian operations remains clouded by persistent pricing pressure, as rising steel import penetration continues to weigh on the domestic market. This challenging environment prompted Gerdau to announce a reduction in future investments in Brazil starting in 2026. While domestic demand remains resilient in segments such as agribusiness and infrastructure, elevated interest rates, global oversupply, and sustained import pressure are likely to keep margins under strain in Brazil’s construction and automotive sectors. We expect stronger trade-defense measures will be needed to restore competitiveness in the domestic market.