Too Early to Declare Victory

Research evidence excerpt

Too Early to Declare Victory

Foundation

July 15, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMLatin America Steel | Latin America Carlos De Alba

Equity Analyst

Too Early to Declare Victory Carlos.De.Alba@morganstanley.comMorgan Stanley C.T.V.M. S.A.+ +1 212 761-4927

Henrique Braga

Imports have declined since positive anti-dumping rulings earlier ResearchHenrique.Braga@morganstanley.comAssociate +55 11 3048-6198

this year, but we believe it is too soon to declare them a success

and highlight early signs that circumvention may be emerging, Latin America Steel Latin America

albeit on a longer timeline than we initially expected. We Industry View No Rating

preview 2Q26 steel earnings.

Key Takeaways

Imports from China subject to AD duties declined sharply after the February anti-

dumping rulings, but rebounded 19% M/M in June.

Imports from ex-China countries and vessel line-up data may indicate potential

early transshipment.

We think it is still too early to conclude that AD measures will permanently

reduce import penetration to historical levels.

2Q26 steel preview: we are slightly above consensus in GGBR & USIM; remain

Equal-weight both names, with new PT of R$26/sh (from R$24/sh) and R$9.7/sh

(from R$7.80/sh), respectively.

We remain Equal-weight GGBR and USIM shares after marking-to-market for new

commodity prices and FX assumptions, and calibrating our models. For Gerdau, we

forecast EBITDA of R$3,303m in 2Q26 (vs. the Visible Alpha consensus of R$3,187m;

+4%) and R$13,565m in 2026 (vs. R$12,629m; +7%), with 2Q26 EBITDA margins

near 26% in the NA division (vs. 25%) and 10% in Brazil (vs. 10%). For Usiminas, we

forecast EBITDA of R$676m in 2Q26 (vs. R$666m; +2%) and R$2,354m in 2026 (vs.

R$2,731m; -14%), with EBITDA margins in the steel division reaching ~12% in 2Q26

(vs.