Geographic diversification; Strong market share and cost position in Brazil; and Wide product scope in long steel products. Operation in a depressed steel sector due to the global recession; Growth strategy based on acquisitions and high capital expenditures; and The cyclical and capital-intensive nature of the steel industry. Standard&Poor's Ratings Services' ratings on Brazilian steelmaker Gerdau S.A. reflect the company's adequate geographic diversification throughout the Americas and privileged cost position in Brazil--arising especially from its strong bargaining power in scrap procurement. Moreover, its strong liquidity has significantly mitigated deterioration in credit measures from the challenging market conditions of 2009. These positive factors are partially offset by Gerdau's increased financial leverage after acquisitions, exposure to the cyclical commodity-oriented long
