Gerdau postpones investment decision to build a plant in Mexico

Brazilian steelmaker Gerdau may decide to increase production capacity in the United States instead of building a new plant in Mexico. This was stated by the company’s CEO Gustavo Wernek, Reuters reports.

Last year, Gerdau announced that it was considering building a new specialty steel plant in Mexico with an annual capacity of about 600 thousand tons, a project that would require an investment of $500-600 million.

The company expected to make a final investment decision by the end of 2024 to start construction of the plant in 2025, but has now postponed it until July.

“We are reviewing all our calculations in light of what is happening. Specialty steel is a very important segment for us in the Americas,” Gustavo Werneck said during the earnings call.

According to him, the company is considering building a plant in two phases or increasing production capacity in the United States.

Gerdau benefits from the tariffs as it has production units in the United States and has previously emphasized its significant activities in the country as a hedge against the risk of protectionism from Trump.

Last fall, Gerdau, through Gerdau Ameristeel, a subsidiary in North America, signed an agreement to acquire the assets of the American Dales Recycling Partnership, which processes ferrous scrap. The deal was valued at $60 million.