...August 13, 2021 SAO PAULO (S&P Global Ratings) Aug. 13, 2021--Brazilian steelmaker Gerdau (###-/Stable/--; brAAA/Stable/--) has benefited from favorable industry fundamentals as it continues deleveraging: It reached adjusted debt to EBITDA of 0.9x as of June 30, 2021, from 1.4x in the previous quarter. Given the solid steel demand in Brazil, mainly in the construction sector, Gerdau is resuming operations in the states of Rio de Janeiro and Paranß that had been shut down for several years. It continues redirecting output to the higher-margin domestic market instead of exporting it, after the several price adjustments successfully it applied over the past year. In addition, the metal spread remains healthy in the U.S., with significant price increases more than compensating for rising cost inflation, amid the good prospects for the country's infrastructure plan. The company is operating close to full capacity in both countries, benefiting from cost dilution, while the restocking process...
