The company, known as Siderperu, gained 6.3 percent to 67 centimos at the close in Lima, the biggest intraday gain since July 18, 2011. The stock has dropped 44 percent over the past 12 months.
Gerdau, which took over Siderperu in 2006, plans to invest $253 million to quadruple annual laminated steel output to 1.4 million tons to handle growing domestic demand. The expansion plan will add a 360,000 metric ton-per-year blast furnace at the steel mill located in the northern port of Chimbote, Siderperu said yesterday in a corporate filing.
Siderperu suspended investment plans and shut a blast furnace in 2008 as a global recession curbed steel demand.
“Investors reacted to the investment announcement, which means they will reopen the mill,” Jose Luis Bustamante, Lima- based head of trading at Cartisa SAB, said today in a telephone interview. “Gerdau has been importing steel instead of producing locally, but now fuel costs have risen.”
To contact the editor responsible for this story: James Attwood at email@example.com