Favorable geographic diversification Efficient cost position in Brazil Strong liquidity Exposure to the volatile commodity markets Fierce competition from imports Challenging market conditions in the next 12 months to 18 months The ratings on Gerdau S.A. reflect our assessment of the company's "satisfactory" business risk profile and "intermediate" financial risk profile. The supporting factors are Gerdau's adequate geographic diversification throughout the Americas, the company's still-favorable cost position in Brazil, its efficient operations overall, and its "strong" liquidity. Offsetting these rating strengths are Gerdau's exposure to the cyclical, commodity-oriented, long-steel industry; the fierce competition from imports; and the potentially challenging market conditions in the next 12 months to 18 months. Gerdau holds a strong market position in Brazil, and it benefits
