Gerdau reports long steel backlog highest since 2021, plans Midlothian outage

Gerdau reported stronger results from its North American operations in the second quarter, with EBITDA up 15% from the prior quarter on firm demand and high asset utilization.

North American financials

In its quarterly earnings report, the Brazilian longs producer said adjusted EBITDA in its North American segment reached 2.6 billion Brazilian Real (US$509.6 million), a 15% sequential gain and a 59% jump year over year (y/y).

North America generated 56% of Gerdau’s net sales in Q2’26. Revenue reached R$10.1 billion, up 8.3% sequentially and 10.8% from the same quarter last year. This was driven by higher shipments, improved pricing, and a richer product mix, but partially offset by a weaker US dollar.

Crude steel output slipped 1.3% from the previous quarter due to planned maintenance and billet restocking. Production was flat y/y. The rolled steel utilization rate was 90% while crude steel’s was 87%.

Steel shipments rose 5.6% sequentially and 7.2% y/y to 1.35 million metric tons, representing 45.2% of Gerdau’s global volume.

In long steel, the order backlog stayed above 100 days, the highest since 2021. Shipments hit a record, the company reported, with resilient demand from data centers and the renewable energy markets.

In special steel, tighter supply and fewer imports pushed shipments to their highest level since the second quarter of 2019. Still, automotive demand remains below historical norms, the company said.

Investments and outage

Gerdau said expansion work at its Midlothian, Texas, longs mill is 80% complete and on schedule to start up in the second half of 2026. Phase 1 will add 150,000 metric tons of annual crude steel capacity and improve efficiency.

The project requires a shutdown of less than two months, limited to the melt shop. “The planned, phased outage is expected to begin in early September,” a spokesperson told SMU.

Gerdau expects no material impact on shipments because semi-finished inventories were built ahead of the outage. “We have adjusted billet inventory to allow rolling operations to continue while the meltshop is shutdown, avoiding any impact on our customers,” the spokesman noted.

Outlook

Through year’s end, the company sees continuing strong demand from renewable energy and data center construction, and a gradual recovery in special steel.

With a solid backlog and anticipating steady metal spreads, Gerdau expects North American margins to remain stable in the third quarter. Cost pressure will come from scheduled maintenance, including the Midlothian shutdown, as well as fuel, the company said.

Laura Miller

Laura Miller is a reporter and editor for Steel Market Update. She has held various editorial positions with steel industry publications, associations, and mills since 2007. She joined the SMU team in 2022. She is a member of the Association of Women in the Metal Industries and a past-president of the AWMI Pittsburgh Chapter. She holds a BA in Latin American Studies from Edinboro University of Pennsylvania.