Andre Gerdau Johannpeter, the President and CEO of Gerdau SA (ADR)(NYSE:GGB), said that last month the World Steel Association issued an update of the prediction for obvious fuel consumption for FY2016, and the following year. It is expected that 2016 will close with a 0.2% jump of international demand for steel after following a decline of 3% in FY2015. Excluding China, the stance points to a 1% rise in demand, hitting 1.5 billion tons, for FY2017, the company project a 0.5% jump in international demand for steel raising by developing and enlarging economies.

That, discounting China, should witness a 4% jump in demand. However, China should witness a 2% decline in demand for FY2017, and that is following the lower pace of economy. Besides their modest projections for the global steel consumption, the industry still has to deal with the same challenges and difficulties that they saw this year will maybe have fulfilled next year following unfair competition approaching from some nations in the global space.

The highlights

Gerdau’s CEO said that additionally, the economic recession in Brazil resulted in lower steel demand. In FY2016, steel consumption is expected to decline by 14% in Brazil, possibly the lowest level ever posted in the last decade. The economy in Brazil are giving indications that maybe the worst time is already over, however, it’s worth stating that recovery will be gradual and slow.

Gerdau has taken some important steps in order to reach at a better tax balance as the current debate surrounding the proposal for constitution that limit actual jumps in public spending in added to the suggested reform of the welfare mechanism which is progressively moving forward. With all of these plans, the central bank can reduce interest rates and boost investments. For 2017, the company expects a 3.8% jump in steel demand in Brazil.

In last trading session, the stock price of Gerdau jumped more than 2% to close the trading session at $4.26.

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Steve Kanaval: Portfolio Manager/Writer/ Market Analyst Steve began his career in the Trading Pits in Chicago making markets at the Chicago Mercantile Exchange (NYSE:CME) the Chicago Board of Trade and the CBOE in the early 80’s. He ran the Morgan Stanley Derivative Prop Trading for the firm specializing in Index Arbitrage. He continued his career as a Trader/Portfolio Manager for multiple Hedge Funds during the Internet Boom of the 90’s managing large portfolios. Steve is known as an expert in MicroCap Technology Stocks and the emerging Digital Currency markets as a Portfolio Manager for his Family Office. Steve has managed portfolio’s in volatile asset classes for 3 decades as a commodity trader, hedge fund manager and digital currency trader and miner. Steve publishes his views on the asset classes in a public forum and has published more than 10,000 articles simplifying these complex and volatile assets for readers. His work is published on multiple sites including Bloomberg,,, CryptoCurrencyNews as a paid contributor. His work includes research, journalism and archived video on important market volatility related to stocks, digital currency and other volatile misunderstood asset classes. He offers a humorous, unique insight and the related back stories and drivers for readers interested in volatility and emerging market assets. Full disclosure Steve is long 25 digital currencies and sits on the board of multiple public companies involved in digital currencies, and owns shares in these companies from time to time.