Latest news with #Gerdau
Winnipeg Free Press
3 days ago
- Business
- Winnipeg Free Press
‘Hard to look at the bright side'
Lost sales, higher prices and material shortages have recently hit Manitoba businesses reliant on steel and aluminum — and it could get worse. U.S. President Donald Trump announced last week he'd raise tariffs on steel and aluminum imports to 50 per cent, a doubling of the current levy. As of Monday afternoon, the change is proposed to begin Wednesday. Current tariffs already have a 'deep and profound' impact across the supply chain, said Catherine Cobden, president of the Canadian Steel Producers Association. MIKE DEAL / FREE PRESS Steel in various forms wait to be shipped to customers. Premier Wab Kinew and Selkirk Mayor Larry Johannson speak flanked by employees and in front of a giant Canadian flag hanging in one of the buildings at the Gerdau Manitoba Steel Mill, 27 Main St., Selkirk, Thursday morning. Reporter: Gabrielle Piche 250327 - Thursday, March 27, 2025. Gerdau SA's Selkirk steel plant is a CSPA member. A majority of the company's steel is exported to the United States; it employs upwards of 500 Manitobans. Gerdau previously directed a reporter to the CSPA for comment. Across Canada, steel shipments to the United States dropped roughly 30 per cent in April, Cobden said. Twenty-five per cent tariffs came into effect in March. 'This will close the market for Canadian exports to the United States,' Cobden said of the prospect of a 50 per cent levy. Selkirk Mayor Larry Johansson considers himself an 'optimistic kind of mayor.' '(But) it's hard to look at the bright side when they raise the tariffs another 25 per cent,' he said. For now, he's clocked activity in Gerdau's lot — plenty of semi-trucks. Gerdau employees haven't been laid off to date, the United Steelworkers confirmed. A 50 per cent tariff would be a 'massive challenge' to Gerdau and similar mills, said Scott Lunny, a United Steelworkers director. 'Who pays the price for that, often, is workers.' 'There's customers I supply in the U.S. that, when he does things like this, they just stop buying and wait six weeks.'– Richard Bobrowski, Imperial Steel owner Meantime, Imperial Steel hasn't laid off staff, despite recording a 25 per cent drop in sales year-over-year. The Winnipeg company, which makes thin-wall steel tubing, exported roughly 70 per cent of its products to the U.S. in 2024. 'You get going for a few weeks, and all of a sudden the president of the United States makes a statement,' said Richard Bobrowski, Imperial Steel owner. 'There's customers I supply in the U.S. that, when he does things like this, they just stop buying and wait six weeks.' American clients are sourcing within their home country more, Bobrowski added. Imperial Steel struggles to give consistent pricing — between tariff changes and recent steel price fluctuations — and U.S. customers are hesitant to sign on, wondering what change could occur before a shipment arrives. Imperial Steel currently splits the 25 per cent import tariff with its American patrons. It made a decision Monday: it won't swallow more than 12.5 per cent of a 50 per cent tariff. 'Which will then stress our company's ability to compete,' Bobrowski said. 'That's when the government has got to get involved.' The Manitoba government tabbed $300 million for tariff-impacted businesses and farmers in its Budget 2025 contingency plan. The funding hasn't yet been used. Evolution Wheel has avoided tariffs on both sides of the border, said owner Derek Hird. The Winnipeg-based construction-grade solid tire maker imports steel from the United States; it's exempt from Canada's reciprocal tariffs because of a carve-out for manufacturers. The company mainly ships south of the border. But the turnaround time has lengthened — Evolution Wheel hasn't been able to source the specific steel it needs. 'Companies … are just buying up huge amounts of stock, and there's no supply,' Hird said. 'You're … fighting for scraps on what's available in the market right now.' 'Companies … are just buying up huge amounts of stock, and there's no supply,' Hird said. 'You're … fighting for scraps on what's available in the market right now.'– Evolution Wheel owner Derek Hird Supply chain issues have resulted in lost sales, Hird added. Meantime, he's paying more for the steel he purchases. So, too, is Northern Steel Buildings, a steel shop enterprise in Morden. It gets steel from Canada and the United States, and it pays Canada's 25 per cent reciprocal tariff. The tariffed products can be cheaper than Canadian steel, said general manager Rick Friesen. That won't be the case if a 50 per cent fee comes online on Canada's side. 'If the Canadian government decides to retaliate … I think that will hinder the Canadian economy and growth,' Friesen said. The economic uncertainty is damaging, said Chuck Davidson, president of the Manitoba Chambers of Commerce. 'We continue to … move the goalposts at the whim of the (U.S.) president.' If businesses feel further tariff effects, government assistance could be needed, he added. The Canadian Steel Producers Association is calling for Ottawa to implement tariffs to incentivize domestic steel use. Local producers compete with unfairly traded international steel that retails cheaper, Cobden asserted. Manitoba is among the jurisdictions pledging to use more Canadian steel. In March, Premier Wab Kinew declared government infrastructure projects requiring steel would source Canadian. These announcements are appreciated, Cobden said, but the projects might be too late to mitigate the damage of a 50 per cent tariff. 'If the Canadian government decides to retaliate … I think that will hinder the Canadian economy and growth.'– Northern Steel Buildings general manager Rick Friesen However such a levy isn't a given, said Gary Mar, Canada West Foundation president. 'I think the best idea is to … wait and see what the president actually does first.' Monday Mornings The latest local business news and a lookahead to the coming week. He believes Americans will push back against tariffs as they feel pain in their pocketbooks. The impact hasn't reached its peak, Mar stated, noting hundreds of U.S. politicians will run for office again next year. Meantime, Manitoba companies are attempting to dodge tariffs. Northern Steel Buildings is consulting agencies about a reciprocal tariff exemption. It's heard of other companies being successful, Friesen said. Eascan Automation in Winnipeg, which creates robots, is tapping Canadian companies to bulk order aluminum goods from Europe for direct shipment into Canada. The goal is tricky because Eascan orders custom parts and its supplier distribution centres are in the United States, said chief executive Camila Bellon. Canada exported $20 billion worth of steel and iron to the U.S. last year and $4.1 billion in aluminum, per Natural Resources Canada data. Gabrielle PichéReporter Gabrielle Piché reports on business for the Free Press. She interned at the Free Press and worked for its sister outlet, Canstar Community News, before entering the business beat in 2021. Read more about Gabrielle. Every piece of reporting Gabrielle produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press's tradition, since 1872, of producing reliable independent journalism. Read more about Free Press's history and mandate, and learn how our newsroom operates. Our newsroom depends on a growing audience of readers to power our journalism. If you are not a paid reader, please consider becoming a subscriber. Our newsroom depends on its audience of readers to power our journalism. Thank you for your support.
Reuters
28-05-2025
- Business
- Reuters
Brazilian steel companies' shares fall after government renews tariff system
SAO PAULO, May 28 (Reuters) - Stocks of Brazilian steel companies fell on Wednesday after the government said it would renew for 12 months a system meant to protect the national steel industry, but that steelmakers have said is ineffective. The steel industry began criticizing the quota system almost as soon as it was set up last year, saying it failed to control the flow of imports, mainly from China. Under the system, as long as the import quota is not reached, steel products can enter the country if they pay import tax of between 9% and 16%. If the cap is exceeded, a 25% tariff applies, Brazilian government news outlet Agencia Brasil said. On the first day of trading following the announcement, CSN ( opens new tab was down 4.4%, Usiminas ( opens new tab dropped 3.6% and Gerdau fell ( opens new tab 1.2%. Brazil's benchmark stock index Bovespa fell only 0.5%. The system, which has been expanded to now include 23 steel products, was already criticized by the sector for being too broad. Tuesday's government announcement retained the exclusion - also criticized by the industry - from the quota and tariff system of imports from countries that have trade agreements or negotiated special conditions with Brazil. The steel sector has urged the government to renew the scheme with the inclusion of all steel products in the 25% tariff, as the European Union and the United States have done. Steel imports rose 27.5% year-on-year in the first four months of 2025, reaching 2.2 million metric tons, according to data from the country's steel mills association, Aco Brasil, which did not comment on the matter on Wednesday.
Yahoo
29-04-2025
- Business
- Yahoo
Brazil's Gerdau remains optimistic about steel orders from the U.S
SAO PAULO (Reuters) - Brazilian steelmaker Gerdau remains optimistic about the performance of its North American operations, given a high order backlog, despite concerns generated by the U.S. trade policy, executives said on Tuesday. Gerdau reported that it has not seen reductions in customer orders in the U.S., where President Donald Trump's administration seeks to stimulate the return of production chains from various sectors back to the country. However, Gerdau decided to cancel studies for the implementation of a special steel mill in Mexico amid the creation of the 25% steel import tariff by the U.S., according to Chief Executive Gustavo Werneck. Gerdau's North American operation was responsible for 49% of the group's operating results in the first quarter. "Of course, some sectors are more concerned than others (about import tariffs), such as the automotive industry, but in general, we understand that we have a robust level of activity," said Gerdau's Chief Financial Rafael Japur.
Reuters
29-04-2025
- Business
- Reuters
Brazil's Gerdau remains optimistic about steel orders from the U.S.
SAO PAULO, April 29 (Reuters) - Brazilian steelmaker Gerdau ( opens new tab remains optimistic about the performance of its North American operations, given a high order backlog, despite concerns generated by the U.S. trade policy, executives said on Tuesday. Gerdau reported that it has not seen reductions in customer orders in the U.S., where President Donald Trump's administration seeks to stimulate the return of production chains from various sectors back to the country. However, Gerdau decided to cancel studies for the implementation of a special steel mill in Mexico amid the creation of the 25% steel import tariff by the U.S., according to Chief Executive Gustavo Werneck. Gerdau's North American operation was responsible for 49% of the group's operating results in the first quarter. "Of course, some sectors are more concerned than others (about import tariffs), such as the automotive industry, but in general, we understand that we have a robust level of activity," said Gerdau's Chief Financial Rafael Japur.
Reuters
15-04-2025
- Business
- Reuters
Exclusive: Dismantling of first oil vessel in Brazil running a year late
RIO DE JANEIRO, April 15 (Reuters) - A dispute between state-run oil company Petrobras ( opens new tab and steelmaker Gerdau ( opens new tab will delay the first dismantling of an oil production vessel in Brazil by at least a year, people familiar with the matter said, in a setback for local shipyards. The operation had been hailed as a chance to reinvent Brazil's struggling shipbuilders as industrial recyclers, generating jobs as Petrobras plans to spend $9.9 billion in the next five years to retire another 10 ships of the same kind. The Reuters Power Up newsletter provides everything you need to know about the global energy industry. Sign up here. The 45,000 ton production, storage and offloading vessel (FPSO), called P-32, was set to wrap up its decommissioning by December 2024 under a new Petrobras sustainability program. Instead, the work began only last month, according to the head of a local metalworker's union in Rio Grande do Sul state Benito de Oliveira Goncalves. He said a dispute between Petrobras and Gerdau over removing petroleum residues from the vessel had stalled work for more than a year. Another person familiar with the matter, who asked not to be named, said the ship arrived in the yard with 30 million liters of oily water and 270,000 liters of marine diesel on board, without a consensus on how to pay for its removal. The marine diesel has been pumped out and sold to a local refinery, Goncalves said, but the oily water still needs to be cleaned out before the hull can be broken down. By next month a firm should be hired for that work, the other person said. A Petrobras executive, who also requested anonymity, said the oil company and steelmaker were in talks without an agreement on how to split the additional costs. It was not clear who had paid for the extra services so far. Asked about the dispute, Petrobras said any contractual issues are discussed privately between the parties. Gerdau said the dismantling operation is under way, with all necessary procedures being conducted "responsibly". Ecovix, which runs the Rio Grande shipyard, declined to comment. Gerdau acquired the P-32 and a second vessel, P-33, for an undisclosed amount in 2023, in a deal giving it the right to dismantle and recycle scrap metal from the vessel. It was a landmark contract, introducing a new business model for Brazilian shipyards that have been struggling for years. President Luiz Inacio Lula da Silva, a former metalworker, has made it a priority to generate jobs at the shipyards with Petrobras, which has also commissioned several new ships. However, the dispute over P-32 means that the Rio Grande shipyard in southern Brazil has yet to benefit from the new decommissioning work. The costs with the vessel at the shipyard have already exceeded the value of the dismantling contract signed between Gerdau and Ecovix, around 30 million reais ($5.13 million), one source said. The delay in dismantling P-32 also means that the shipyard may lose the contract to break down P-33, the source said, as it has other work lined up, including four vessels for Petrobras.
