EDITION EDITION EDITION BRAZIL STEELNEWS

BRAZILIAN STEEL INDUSTRY CONFIRMS 2018 RECOVERY TRAJECTORY

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The performance of the Brazilian steel industry in 2018 should conclude its recovery trajectory, with growth in domestic sales of 8.9% in relation to 2017, totaling 18.8 million tons, and of 8.2% in apparent consumption, which is expected to reach 21.1 million tons, according to a forecast by the Brazil Steel Institute. Regarding production, in view of the entry of new steel producers in the market and the achievement of the full rhythm of operation by CSP, the Brazilian steel industry should have record crude steel production (estimated at 36 million tons) this year. Imports are expected to increase by 2.6% compared to 2017, totaling 2.4 Mt and exports expected to fall by 7.2%, and should reach 14.2 Mt.

Despite positive numbers for 2018, when compared to 2017, projections of domestic sales and apparent consumption still remain below the levels reached in 2013.

The truckers' strike, which occurred in May, led to a further increase in steel sales in the domestic market in 2018, and US President Donald Trump's decision to restrict the US steel market (Section 232) triggered protectionist escalation by the other countries hindering the growth of the volume of the exports.

With optimistic expectations about the measures being announced by the future Government, the forecasts of the Brazil Steel Institute for 2019 are an increase of 5.8% in internal steel sales, totaling a volume of 20 million tons. Apparent steel consumption is expected to rise 6.2% in 2019, going to 22.4 million tons.

The Brazil Steel Institute, which integrates the business coalition of the industry alongside other 09 class entities (ABIMAQ, ABINEE, Abicalçados, ABIQUIM, ABIT, ABRINQ, ANFAVEA, AEB and CBIC), has talked with the government's transition team, defending an agenda that has as its first and essential priority the fiscal adjustment, associated with the approval of pension and tax reforms. Also included in the agenda of the coalition are the resumption of investments in civil construction and infrastructure and the promotion of exports. In relation to a greater commercial opening of the country, the coalition understands that only being done after the corrections of the competitive asymmetries. In this sense, the economic area of the future government has already signaled that the opening will be done in a gradual, safe and negotiated way.

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The Minister of Industry, Foreign Trade and Services (MDIC), Marcos Jorge de Lima received the 'Personality of Steel' award of 2018, conferred by Brazil Steel Institute in its traditional luncheon of the year, 11/27, at the Hilton Copacabana Hotel, in Rio de Janeiro. According to Sergio Leite de Andrade, Chairman of the Board of Brazil Steel Institute, Marcos Jorge acted in the conduction of themes of the sector, especially in the North American market, which were fundamental.

Marcos Jorge gave thanks for the important tribute and affirmed that he shared it with the MDIC servers, that have always supported the country's development initiatives.

Minister of the MDIC, Marcos Jorge is honored at the Brazil Steel Institute luncheon

Roadshow Campo Grande (MS)

(from left to right) Sergio Leite, President of the Board of Brazil Steel Institute; Minister Marcos Jorge de Lima and Marco Polo Lopes, executive president of Brazil Steel Institute

The luncheon brought together about 100 people, including leaders of the steel industry, representatives of the production chain and public and private institutions with which the industry maintains partnership.

CBCA RoadShows bring together about 400 people in 2018The 2018 RoadShows of the Brazilian Center of Steel Construction (CBCA) gathered around 400 people in total in four cities this year. The project, which began in 2005 and has already had 190 editions, passed through Campo Grande, Florianópolis, Goiânia and Vitória. The audience of the events was composed mostly by professionals from the field of civil construction and students of the courses of architecture and urbanism and civil engineering.

From Conception to Construction in Steel (Campo Grande and Florianópolis) - already a traditional project on CBCA's RoadShows agenda - featured the lectures "The architectural conception from industrialized systems" by architect Sérgio Sampaio (Mackenzie and Escola da Cidade) and "Hybrid Solutions and Mixed Steel and Concrete for Multi-Storey Buildings" by engineer Flávio Gaiga (PUC-Minas and Unicamp). These events had among their supporters the local Civil Construction Trade Unions, the State Engineering and Agronomy Councils, the State Councils of Architecture and Urbanism, and the local Industry Federations (FIEMS and FIESC). The RoadShow of Florianópolis also had the national involvement of the Câmara Brasileira da Indústria da Construçã (Brazilian Chamber of Construction Industry) and the Associação Brasileira dos Escritórios de Arquitetura (Brazilian Association of Architecture Offices).

Light Steel Framing - Project, Applications and Execution (Goiânia and Vitória) counted on the lectures of the architect Alexandre Kokke (UFMG and UFOP), of the engineer Jonas

Silvestre (UFPB and USP) and the business administrator Tiago Gomes (IMECON). This project had the same supporters of the traditional RoadShow and the speakers discussed the LSF system, its implications, points of attention and answered the questions of the participants. They also addressed aspects such as innovation and applications, in order to inform those present about the advances of this technology.

Participants received CBCA manuals and magazines and drawings of additional technical material were also conducted at the end of the meetings. Presentations of the speakers and information about each of the events can be found at www.cbca-acobrasil.org.br. The objective of the entity with the project is to increase the knowledge of industrial steel construction among students and professionals.

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Registration of the 1st

CBCA Competition for Engineering Students is extended

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Vallourec Grouplaunches a new brand covering all client needs by combining physical and digital services

Since September, Vallourec Group has made available, in an unprecedented way in the pipe segment, a set of physical services combined with digital services and technologies to help its clients improve operational performance at each stage of the value chain. The new Vallourec.smart brand increases the visibility of these services, which since then have had a unique identity, reinforcing the Company's commitment to ensuring the sustainability of its business with competitive and innovative solutions. The launch was on September 24, during Rio Oil & Gas, where Vallourec was present.

Physical and digital services can be deployed from Grupo's facilities and service bases around the world or wherever clients need them. "Through an integrated digital platform, we enable them to easily and directly access our full range of services and solutions to meet their needs. In this way, we position ourselves not only as an internationally renowned Company recognized for manufacturing premium products, but also as an efficient partner in providing solutions," highlights the director-president of Vallourec companies in Brazil, Alexandre Lyra.

In addition, the initiative marks a new phase for Vallourec Group, which is increasingly focused on the digital. That's because Vallourec.smart connects premium pipe data, physical services and solutions with in-depth analysis and data visualization to help customers accelerate their decision-making processes, improve asset integrity and asset management, and reduce Total Cost of Ownership. Enterprise (TCO in the English acronym). All this is done in a safe and assertive way, since Vallourec employs the most rigorous virtual security protocols, giving reliability, accessibility and security to all data.

Photo Gerdau Açominas - Rodoanel - Walkways built with trussed isostatic beams and floor executed with steel deck type structural slabs

Modular walkways on DNIT Highways is the theme that must be worked out by the participants of the 1st edition of the Engineering Students' Competition, a project developed by the Brazilian Center of Steel Construction (CBCA). Interested teams must enroll by 02/11/2019, with a minimum of two and a maximum of six students. Students, who must be tutored by a professor from the same school or college, are challenged to a competition that complements their training, with comprehensive experience in the design, structural design and assembly scheme of modular steel or mixed steel-concrete walkways. The jury will evaluate, in particular, the correct and appropriate use of steel, both in structural and aesthetic aspects, as well as in the constructive aspects of fabrication, transportation and assembly. One of the main highlights of this Competition is the fact that the winning project can be executed, making it a reality to build the walkway designed by the winning team, to whom will be awarded the respective credits and moral copyrights.

The winning team will receive R$ 8,000, distributed among the students responsible for the winning project and the professor adviser, as well as several manuals on steel construction of CBCA and free vouchers for the online courses offered by the entity. The announcement of the winner will be made on 04/19/2019 on the CBCA website. For more information on the competition go to: www.cbca-acobrasil.org.br/engenharia

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Winner of the CBCA Competition for Architecture Students comes in 2nd place in the Alacero competitionAfter winning the 11th Architecture Students Competition of the Brazilian Center of Steel Construction (CBCA), the student team of Universidade Presbiteriana Mackenzie, in São Paulo, won second place in the 11th Alacero Design Competition in Steel for Architecture Students 2018, promoted by the Asociación Latinoamericana del Acero (Latin American Steel Association) (Alacero). In first place was with the Chilean team, Universidad Finis Terrae, with the Colombian team receiving an honorable mention from the judges. The announcement of the winners was made on 11/05, during the 59th edition of the Latin American Steel Conference, and the Judging Commission was composed of professionals from the countries that had representatives in the Latin American phase of the competition - Brazil, Argentina, Chile, Colombia, Mexico and the Dominican Republic.The students João Pedro, Kelly Comparsi, Camilla Duarte and Felipe Maia, advised by Professor Renato Carrieri, received the mission to represent Brazil after presenting a project with good urban insertion and excellent resolution of the program, as well as the good use and detailing of the structure of steel with the correct use of existing topography. "Pavilion with Greenhouse for Botanical Park" was the theme of the competition and the prize received by the Brazilian team was US$ 3 thousand.

With the participation of several students from Latin America, the theme was developed through projects conceived, designed and structured in steel, while observing the technical bases specified by the competition regulations. The students developed works that could allow the exhibition of biomes and conservation of species, as well as scientific investigation and teaching, contributing to the awareness of sustainable development.

Since 2008, the CBCA and Alacero have been partners in holding the Architecture Students Competition, with CBCA being responsible for the Brazilian stage. Throughout these years, the national competition has already had more than 2000 registered teams, with about 120 participating universities per year, being considered today as the most important in Brazil for architecture students

Eight Brazilian startups win the Sustainable Charcoal Challenge Eight startups were winners in the Sustainable Charcoal Challenge, promoted by Açolab, ArcelorMittal's lab dedicated to innovation and the development of ideas and solutions. Each of the companies will receive up to R $ 250,000 for investments in the development of projects to optimize the charcoal ovens in the steel production chain.

Of all those enrolled, 12 startups were selected and spent the last week in the lab to shape their projects, from mentoring sessions, training and pitches training. On November 23, they presented their projects to an assessment bank, made up of executives from ArcelorMittal, ArcelorMittal BioFlorestas, Açolab, Sebrae and Senai.

The winning startups are: A2M Solutions in Agribusiness, Mining and Environment; Eco Carvão Vegetal Ltda; Fertlitatis Innovattio Pesquisas Ltda; Órbita Tecnologia; Refractory Eco Design Desenvolvimento de Projetos Ltda; Reutilize; Vallum Verde Biotecnologia e Energia Sustentáveis; and WB Suporte Técnico.

The selected ones will develop the projects, in the first semester of 2019, in conjunction with the Institutos Senai de Inovação e Tecnologia (Senai Institutes of Innovation and Technology) and the ArcelorMittal R&D team, sharing the financial and technological risks of the project.

The Sustainable Charcoal Challenge is an unfolding of the Edict of Innovation for Industry, dedicated to fostering the search for solutions to increase the competitiveness of Brazilian industry, through the development of projects in industrial companies of all sizes, including technology-based startups. The Edict is an initiative of Senai, Sesi and Sebrae.

Scholarship Program to continue their projects.

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Usiminas awards university students with innovative solutions for their processesUsiminas went to the campus of the Universidade Federal de Minas Gerais (UFMG), on November 22 and 23, with the Boot Camp Hands ON event, a marathon of innovation that was attended by 40 university students from Belo Horizonte. They received three challenges from the company, in different plants in the country, to propose innovative solutions to processes related to commercial, results and people themes. The winning groups were awarded with participation in the Usiminas Internship

The challenges posed by Usiminas were related to the management pillars of the company Customers, People and Results, which support the strategic planning, in the areas of Logistics, Selection and Environment. The university students, through teams with members from different areas of knowledge, worked on solutions presented at the end and chosen by an evaluation bank, which included the participation of professionals from Usiminas, UFMG professors and mentors of the event.

Winning TeamsGabriel Victor (PUC-MG), Heitor Moura (UFMG) and Victor Prudente (UFMG), faced the challenge of the Logistics area, proposed the creation of a software for optimizing the programming of port cargoes in the holds of ships that transport Usiminas products to optimize the process with more quality, efficiency and safety.

In the area of environmental challenge, students Ana Luíza da Cunha (UFOP), Arthur Amaral (UFMG), Fábio Fernandes (UFMG) and Leonardo dos Santos (PUC-MG) developed a system with cameras that automatically captures, analyzes and identifies the intensity of atmospheric emissions at the Ipatinga plant, one of the current processes.

In order to solve the Selection challenge, the team composed of Rafael Lopes (Uni-BH), Juliana Otoni (UFMG) and Mariana de Castro Pasqualini (UFMG) presented the proposal to develop a web environment to manage Usiminas' personnel recruitment process, ensuring more agility, assertiveness and cost reduction with the use of artifcial intelligence.

The members of the winning groups, besides the students Lucas Torres (UFMG), Luiza Guerra (UFMG) and Mariana Mizrahy (UFMG), recognized as outstanding for their participation, were awarded a place in the Internship Scholarship Program of Usiminas. They will be able to develop their proposals for the challenges of the company for six months through research oriented by UFMG professors and professions within the company.

Gerdau announces investment of R$ 550 million in PindamonhangabaGerdau announced in November investments of R$ 550 million for the installation of a new continuous casting at its Pindamonhangaba plant in the State of São Paulo. The equipment will be operational by 2020, with the aim of increasing the efficiency and productivity of the unit. With the new continuous casting, Gerdau will produce steels with higher cleaning content and mechanical strength, in line with the technological trends of the automotive industry and oil and gas segment.

"The new investment reinforces our strategy of expanding operations in special steel products with high added value and, at the same time, we are anticipating the future needs of our clients. This is another step in the development of innovative solutions in the steel market, in line with the transformation process we are experiencing at Gerdau," says Gerdau CEO Gustavo Werneck

The investment is the first step for the future expansion of the installed capacity of the Pindamonhangaba plant, from 600 thousand tons/year to 1 million tons/year of specialty steel.

Brazil Steel Institute | Telephone (21) 3445-6300 | www.acobrasil.org.br | acobrasil@acobrasil.org.br

Crude steel production reached 29.2 million tons in the period up to October 2018, which represents an increase of 2.6% over the same period of the previous year. The production of rolled products during the same period was 19.5 million tons, an increase of 4.7% compared to 2017. The production of semi-finished products for sales was 8.1 million tons in the period of 2018, which means an increase of 1.0% in the same base of comparison1.

Domestic sales were 15.4 million tons from January to October 2018, an increase of 9.5% when compared to the same period of the previous year.

Apparent domestic consumption of steel products was 17.3 million tons in the same period, which represents an increase of 8.2% compared to the period from January to October 2017.

Imports reached 2.1 million tons in the period from January to October 2018, which translates into an expansion of 2.9% over the same period of the previous year. In value, imports reached US $ 2.2 billion, up 18.7% over the same period of comparison.

Regarding exports, SECEX/MDIC changed the methodology for collecting data from the Portal Único de Comércio Exterior (Single Foreign Trade Portal, which could generate significant changes and revisions in the results accumulated until October, as occurred in August and September. Until the system is standardized, in order to continue the original trend of the data, Brazil Steel Institute opted, temporarily, not to publish the SECEX/ MDIC2 export indicators.

¹ Due to a loss that occurs during the steel production process, the sum of the production of rolled and semi-finished products for sales does not equal the total production of crude steel.² http://comexstat.mdic.gov.br/pt/informativo/25

Crude Steel Production

MONTH 2017 2018J 2.825 2.866F 2.571 2.714M 2.845 3.065A 2.893 2.949M 2.928 2.679J 2.649

2.9203.0222.8473.0323.153

J 2.831A 2.955S 2.958O 3.045N 3.028 -D 2.822 -

1.950

2.200

2.450

2.700

2.950

3.200

J F M A M J J A S O N D2018 2017

Source: Aço Brasil

Unit:103 t

STATISTICS