Fitch Ratings revises Gerdau outlook from stable to positive
Fitch Ratings upgraded its outlook for Brazlian steel producer Gerdau from stable to positive, based on the company's potential tomprove its business profile and profitability in the short to medium term, supported mainly by a stronger presence in North Americaand a recovery in its Brazilian operations.
In a statement, Fitch said Gerdau has "a strong business profile, resilient free cash fow (FCF) across cycles, a conservativecapital structure and robust liquidity".
Fitch also noted that Gerdau's geographic diversification and fexible electric arc furnace (EAF) steel production structure give thecompany competitive advantages and allow it to respond quickly to changes in market conditions
In Fitch's view, Gerdau is expected to benefit from higher U.S. import tarifs, which should support domestic steel prices, as well asfrom antidumping duties on steel imports in Brazil, which should help stabilize local prices. Prices could rise further if heawy plateand HRC produced by Gerdau in Brazil are included in the antidumping measures adopted by Brazilian authorities
Gerdau has production facilities in Brazil, Uruguay, Argentina, Peru, Mexico, the US and Canada.
From: Steel Orbis
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