Caio Greiner

Caio Greiner asked how expanding protectionist measures and anti-dumping approvals in Brazil, particularly the 25% tariff and HRC anti-dumping, might influence Gerdau's investment strategy in the region, including potential reopening of units or new rolling mill investments. He also inquired about the company's discussions regarding divestment of non-core assets, seeking details on specific assets and the rationale.

Answer

CEO Gustavo Werneck expressed optimism about trade defense measures becoming more technical, citing the HRC anti-dumping as a significant landmark expected to become definite by June/July. He stated these measures would not change the BRL 4.7 billion CapEx guidance for 2026, emphasizing continued investment in Brazil to improve competitiveness, primarily through projects like Miguel Burnier, rather than reopening hibernated mills or significant new capacity. CFO Rafael Japur detailed non-core asset divestment discussions, focusing on excess forest assets/farms (due to coal production) and fragmented real estate acquired through past acquisitions. He stressed that any divestment would be subordinate to value generation, not driven by a need for sales, and there's no concrete plan or guidance yet.

Caio Greiner asked about the expanding protectionism and anti-dumping measures in Brazil, specifically how the government's recent actions, like the 25% tariff and HRC anti-dumping, impact Gerdau's view on investing in the region, reopening units, or investing in rolling mills. He also inquired about the company's discussions regarding asset divestments, particularly non-core assets, and if any specific assets are being considered for sale.

Answer

CEO Gustavo Werneck expressed optimism about trade defense measures in Brazil transitioning from political to technical, citing the HRC anti-dumping as a significant landmark. He affirmed that these measures would not alter the BRL 4.7 billion CapEx for 2026, with continued investment in Brazil focused on competitiveness and cost reduction, particularly with the Miguel Burnier project. CFO Rafael Japur detailed that asset divestments are being explored across two fronts: excess forest assets/farms and fragmented real estate from past acquisitions. Japur clarified that any divestment would prioritize value generation and is not driven by a need for sales, with no concrete plans or guidance yet.

Caio Greiner questioned Gerdau's optimistic U.S. outlook in the face of signs of a broader economic slowdown, asking if demand was real or panic buying. He also inquired about future investment plans for energy self-production in Brazil and its impact on overall CapEx.

Answer

CEO Gustavo Werneck explained that their U.S. optimism is rooted in their 'protected niche' of structural profiles for large, long-term projects like data centers, which are less sensitive to short-term economic shifts. On energy, he confirmed plans to continue investing for self-production due to Brazilian tax benefits and cost reduction. CFO Rafael Japur added that these investments are pursued when they meet high IRR thresholds and are managed within the company's overall capital discipline.

Caio Greiner questioned Suzano's updated structural view on long-term pulp fundamentals, particularly concerning China's growing capacity, the wood chip market, and anti-evolution ideas, asking if concerns have increased or decreased. He also requested an update on the Kimberly-Clark JV (KCJV) asset performance, synergy potential, and any assets that might not fit the portfolio.

Answer

Leonardo Grimaldi, Executive Vice President, indicated a neutral view on pulp fundamentals, maintaining the trend of Chinese verticalization affecting the market, with pulp production not yet growing but hardwood pulp imports booming. Luiz Renato Costa, Strategy/M&A, and Joao Alberto Fernandez De Abreu, CEO, expressed positive impressions of the KCJV assets, confirming initial estimates and focusing on value creation through optimizing assets and geographies, while acknowledging the challenge of integrating two organizational cultures.

Caio Greiner asked how recent U.S. trade policy developments have impacted Suzano's intentions to acquire assets in the U.S., questioning if the company is taking a 'wait-and-see' approach. He also questioned the reported inflation in the industry cash cost curve, given deflationary pressures like lower oil prices, and asked for more detail on the revision.

Answer

Aires Galhardo, an executive, responded that Suzano's mid-to-long-term strategy for the U.S. remains unchanged, though the company is carefully monitoring local market demand. Leonardo Grimaldi, an executive, explained that the primary driver for the increase in the marginal cash cost was foreign exchange effects, specifically the appreciation of the Swedish krona and euro, which significantly impacted European producers' cost structures.

Caio Greiner questioned Vale's confidence in its 2026 iron ore production guidance given slow growth year-to-date, and asked for an update on the status of the 'Caves Decree' legislation and the company's contingency plans.

Answer

Carlos Medeiros, EVP of Operations, and CEO Gustavo Pimenta both expressed confidence in the production guidance, with Pimenta reiterating a 'value over volume' discipline. Regarding the Caves Decree, Pimenta stated they are 'hopeful' but are prepared to deliver on long-term targets even without it, thanks to internal process improvements and the development of alternative plans.

Caio Greiner asked for an update on Vale's 'value-over-volume' strategy, questioning at what price point Vale would consider cutting its high-cost capacity. He also inquired about the progress of the CapEx efficiency program and if there was potential to lower the full-year guidance.

Answer

Executive Rogério Nogueira explained the strategy involves concentrating low-grade ore and launching new mid-grade products to maximize absolute value, but did not provide a specific price trigger for capacity cuts, citing market volatility. Executive Marcelo Bacci clarified that Q1 CapEx is seasonally low and the company is maintaining its $5.9 billion guidance for the year for the time being.

Caio Greiner of UBS Group AG inquired about Mexico's steel supply dynamics, focusing on the impact of new trade measures and an ArcelorMittal production issue on market balance and Ternium's potential market share gains. He also asked for a breakdown and quantification of the expected Q3 cost reductions, distinguishing between internal initiatives and lower raw material costs.

Answer

CEO Máximo Vedoya stated that Ternium is positioned to gain market share in flat products due to lower imports and its own efforts, while any gains from the ArcelorMittal incident in long products would be marginal. He clarified the $300 million cost efficiency plan for the year is separate from raw material price changes and stems from procurement, process improvements, and productivity initiatives. He also noted that while Mexico's trade measures are a positive start, more are being analyzed to align with regional partners.

Caio Greiner of UBS Group AG inquired about the steel supply dynamics in Mexico, asking if recent trade measures and a competitor's production incident could rebalance the market and if Ternium is positioned to gain share. He also requested details on the company's cost reduction outlook, seeking a breakdown between operational initiatives and raw material impacts, and a quantification of expected Q3 savings.

Answer

CEO Máximo Vedoya explained that Ternium is well-positioned to gain market share in Mexico's flat products segment due to lower imports and new capacity, though gains in long products from a competitor's issue would be marginal. He confirmed a $300 million annual cost efficiency plan, separate from raw material costs, with two-thirds of the savings expected in the second half of the year. These savings stem from procurement, process stability, and productivity enhancements.

Caio Greiner asked for CSN's official stance on the judicial decision obligating the sale of its Usiminas shares and questioned the cost and margin outlook for the steel segment in the upcoming quarters.

Answer

An unnamed executive stated that CSN is still within the court-mandated period to sell the Usiminas shares and is awaiting the ideal moment to monetize the asset. Executive Luis Martinez explained that steel costs are expected to continue dropping in the second half of the year due to operational efficiencies, though reaching the BRL 3,000/ton target this year is unlikely. He emphasized a strategic focus on margin over volume by prioritizing higher-value products.

Caio Greiner asked for CSN's official stance on the judicial ruling requiring the sale of its Usiminas shares. He also sought clarity on the steel segment's cost trajectory, questioning how factors like exchange rate depreciation, lower coal prices, and the absence of maintenance stoppages would impact margins in the upcoming quarters.

Answer

An unnamed executive stated that CSN is still within the court-mandated period to sell its Usiminas shares and is evaluating the optimal time to monetize the asset. Executive Luis Martinez explained that while steel costs are expected to continue dropping in the second half of the year due to operational efficiency efforts, reaching the target of BRL 3,200 per ton this year is unlikely. The focus remains on improving margins through a better product mix and prioritizing value.