Companhia Siderurgica and Gerdau Under Review: Steel Industry to See Robust Growth in 2013

 Companhia Siderurgica and Gerdau Under Review: Steel Industry to See Robust
                                Growth in 2013

  PR Newswire

  LONDON, February 8, 2013

LONDON, February 8, 2013 /PRNewswire/ --

2012 was a tough year for the steel industry due to economic uncertainties.
However, the improving global economic outlook suggests that the steel
industry could see a turnaround. With growth in China accelerating and the
housing market in the U.S. continuing to improve, companies such as Companhia
Siderurgica Nacional (ADR) (NYSE: SID) and Gerdau SA (ADR) (NYSE: GGB) can
expect robust growth in 2013. StockCall technical research on Companhia
Siderurgica and Gerdau is currently available for free by signing up at

Steel Demand to be Driven by China

Over the last decade, China has been the biggest driver of growth in the steel
industry. The country's demand for steel has been driven by large
infrastructure projects. Not surprisingly, the slowdown in the Chinese economy
last year had a significant impact on the steel industry.

However, concerns over a hard landing in China have eased. In fact, growth is
expected to accelerate in the world's second-largest economy. In the fourth
quarter of 2012, the Chinese economy grew more than forecast. With growth
picking up in China, the demand for steel for infrastructure and construction
projects should see a rebound. This is a good sign for Brazilian companies
such as Companhia Siderurgica Nacional and Gerdau. Sign up for the free
technical report on 

Rising Construction Spending in the U.S.

Another driver for growth in steel demand in 2013 will be rising construction
spending. In the U.S., construction spending has rebounded sharply in the last
one year thanks mainly to a recovery in the housing market. Non-residential
construction activity in the U.S. is also rising. These trends are likely to
continue in 2013. The American Institute of Architects expects spending on
non-residential construction to rise 6.2% in 2013.

The weakness in the construction sector following the financial crisis of 2009
had been one of the main factors behind the decline in the steel industry.
However, with the sector now recovering, steel industry can expect robust
demand in 2013 and beyond.

Growth in Automotive Sector

The automotive sector is one of the biggest consumers of steel. Last year, the
automotive sector saw substantial growth and the trend is likely to continue
in 2013 as the economic outlook continues to improve. In the U.S., improving
consumer confidence, stabilizing labor market and cheap financing are likely
to be the key drivers of growth in auto sales. China is also expected to drive
growth in the automotive sector.

Europe Improves

The biggest drag on the steel industry in the last two years has been Europe,
where demand has fallen sharply due to the debt crisis. Recently, Lakshmi N.
Mittal, Chairman and CEO of world's leading integrated steel and mining
company, ArcelorMittal, said that demand for steel in Europe fell 8.8% in
2012. However, measures taken by the European Central Bank (ECB) last year
have helped in easing concerns over the debt crisis in Europe. Recent data
from the euro zone suggests that the region's economy is stabilizing, which is
a good sign for steel companies.

What Can Compahia Siderurgica Nacional and Gerdau SA Expect in 2013?

After a tough year, Brazilian steel companies Companhia Siderurgica and Gerdau
can expect some robust growth this year. Apart from the factors highlighted
above, growth for the Brazilian steel companies will also be driven by
investment in infrastructure projects in Brazil. With Brazil hosting the 2014
Football World Cup and the 2016 Summer Olympics, spending on construction
projects is expected to remain robust in the next few years, which should
benefit Companhia Siderurgica Nacional and Gerdau. Register now and download
the free technical analysis on Gerdau at 

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