North American Operations Performance

Described as having a stable backlog (≈60 days), healthy demand, investments in operational efficiency at plants in Texas and Tennessee, and robust margins despite general market challenges. " "

Noted a recovery in shipments and performance with a slightly lower backlog (≈55 days), continued investments in modernization (e.g., Jackson plant), and maintained stable margins in a resilient market. " "

Consistent positivity with a slight improvement in performance and a minor backlog adjustment, reinforcing a steady and resilient operational outlook.

Government Policy Impact

Emphasized U.S. policies like the IRA, CHIPS Act, and infrastructure investments as key drivers of steel demand in North America while highlighting challenges in Brazil due to delayed or insufficient trade defense measures. " "

Continued highlighting the positive impact of U.S. policies (IRA, reshoring) on local steel demand and infrastructure investments, while noting that trade defense measures in Brazil, though introduced, have not fully offset import pressures. " "

Steady sentiment: U.S. government measures remain a positive factor, whereas challenges in Brazil persist, albeit with ongoing monitoring and incremental policy responses.

Brazilian Market Dynamics

Focused on significant challenges caused by rising Chinese steel imports, leading to production shutdowns and layoffs, and criticized the slow government action on trade defense measures. " " " "

Reiterated challenges from rising Chinese imports—with a 46% volume increase and nearly 20% market penetration—and acknowledged new trade defense measures (e.g., quotas, tariffs) as a positive step, though challenges remain. " " "

Persistent concern: The negative impact of Chinese imports continues to be a major issue though recent government measures create cautious optimism for gradual improvement.

Special Steels Strategic Investments/Automotive Recovery

Highlighted strategic investments such as the completion of the Monroe Mill upgrade in the U.S., the recovery in the automotive market with hybrid trends, and adjustments in Brazil to counteract market challenges. "

Expanded the discussion with new initiatives, including a greenfield feasibility study for a special steels unit in Mexico driven by near-shoring trends, alongside continued recovery signals in both U.S. (gradual automotive recovery) and Brazil. " " "

Upbeat and expanding: While both periods were positive, the current period adds a new strategic initiative in Mexico and emphasizes long-term growth opportunities in the automotive and special steels segments.

Value-added Product Transformation

Described the Ouro Branco mill’s shift from its original export-oriented, semi-finished goods focus toward producing value-added products (e.g., hot coiled rolled strips) to cater to the construction demand for metallic structures. "

Emphasized further investments at Ouro Branco in mining and rolling mills to pivot towards higher value-added products for the domestic market, aligning with a strategic shift to address potential export market limitations. "

Continuing transformation: The focus stays on enhancing value by shifting to higher-end products, with an evolving focus from exports to the domestic market, reflecting adaptability and long-term competitiveness.

Capital Expenditure Execution Delays

Addressed frustration around delays linked to slow governmental decision-making in Brazil and challenges posed by trade defense measures, with concerns over projects facing cost pressures if halted. " "

Attributed delays to seasonality and weather (e.g., heavy rainfall affecting mining operations), noting that disbursements remain in line with annual guidance, thereby reducing earlier negative connotations. "

Reframed perspective: While previously seen as a painful consequence of external delays, the current period explains these delays with natural and seasonal factors, mitigating earlier negative sentiment.

Reliance on Cost-Cutting Measures

Emphasized the short-term focus on reducing fixed costs (e.g., structural adjustments in Brazil) as a necessary response amid challenging volume growth, aiming to preserve margins despite high import penetration. " "

Continued to stress that performance improvements derive mainly from cost reductions rather than volume increases, with North American competitiveness enhanced through proactive mill preparation, and a steady focus in Brazil. "

Steady reliance: The strategy remains firmly focused on cost improvements as a key lever to drive profitability, with consistent emphasis across periods despite varying market headwinds.