Brazilian steelmaker Gerdau’s CEO André Gerdau Johannpeter is expecting savings of about 700 million reais (US$336 million) annually on production costs due to a reduction in the tax on electricity prices recently announced by President Dilma Rousseff, local press reported.

"If the measures take effect as expected, we will be able to reduce costs in our Brazilian operations by about 5%," Johannpeter said.

According to the executive, the key factors for better company financial results next year include self-sufficiency in iron ore production and the shipment of surplus output, as well as a successful start of operations in the company’s flat steel hot rolled coils business.

Steel production has continued to improve in recent quarters, but prices are not following suit, according to Johannpeter. "The trend has always been to keep pace with demand prices. Currently, we are experiencing a [production/pricing] curve detachment..."

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