SecProbe.io

<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>
                       [GRAPHIC OMITTED] [GRAPHIC OMITTED]

                                                             September 15, 2005

By EDGAR

Nili Shah
Accounting Branch Chief
Securities and Exchange Commission
Mail Stop 7010
100 F Street, N.E.
Washington, D.C. 20549

                           RE: Gerdau S.A. (File No. 001-14878)
                               --------------------------------

Dear Ms. Shah:

         We acknowledge receipt of the letter from the Staff of the Securities
and Exchange Commission, dated August 17, 2005, regarding the annual report on
Form 20-F of Gerdau S.A. (the "Company") for the fiscal year ended December 31,
2004 (the "Annual Report"). For your convenience, we have included the Staff's
comments below and have keyed our responses accordingly.

         As noted below in our responses, we have supplied the requested
clarification or agreed to change or supplement the disclosures in our future
filings, as the case may be. Our agreement to change or supplement the
disclosures in our filings is undertaken to cooperate fully with the Staff and
to enhance the overall disclosure in our filings, and not because we believe our
prior filing is materially deficient or inaccurate. Accordingly, any changes
implemented in future filings should not be taken as an admission that prior
disclosures were in any way deficient.

<PAGE>

Nili Shah
September 15, 2005
Page 2

F.  DISCLOSURE OF CONTRACTUAL OBLIGATIONS, PAGE 43

                  1.       INCLUDE YOUR INTEREST COMMITMENTS UNDER YOUR
                           INTEREST-BEARING DEBT IN THIS TABLE, OR PROVIDE
                           TEXTUAL DISCUSSION OF THIS OBLIGATION BELOW THE
                           TABLE. IF YOU PROVIDE A TEXTUAL DISCUSSION, THE
                           DISCUSSION SHOULD QUANTIFY THE INTEREST PAYMENTS
                           USING THE SAME TIME FRAMES STIPULATED IN THE TABLE.
                           REFER TO FOOTNOTE 46 TO RELEASE 33-8350
                           "INTERPRETATION: COMMISSION GUIDANCE REGARDING
                           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                           CONDITION AND RESULTS OF OPERATIONS."

       Our response: We appreciate the comment by the staff and we will include
       such disclosure in our future filings. For your information, please find
       below the interest commitments under our interest-bearing debt as of
       December 31, 2004, using the same time frame stipulated in the table and
       use for our disclosures in our Form 20-F for the year ended December 31,
       2004:

<TABLE>
<CAPTION>
                                            PAYMENTS DUE BY PERIOD

      CONTRACTUAL OBLIGATIONS                               LESS THAN                                   MORE THAN
      ($ THOUSANDS)                             TOTAL        1 YEAR         1-3 YEARS      4-5 YEARS     5 YEARS
      -------------                            -------      ---------       ---------      ---------     -------
<S>                                            <C>           <C>             <C>            <C>          <C>
      Interest payments on debt (*)            567,560       78,546          230,751        111,937      146,326
</TABLE>

      (*)Computed using interest rates and exchange rates as of December 31,
      2004 for variable interest debt and for debt denominated other than in
      U.S. dollars, respectively.

LEGAL PROCEEDINGS, PAGE 56

                  2.       WE NOTE THAT YOU HAVE ASSESSED THE MATERIALITY OF THE
                           YOUR LEGAL PROCEEDINGS WITH REFERENCE TO THE
                           FINANCIAL POSITION OF THE COMPANY. EXPAND YOUR
                           ASSESSMENT OF MATERIALITY WITH REFERENCE TO YOUR
                           RESULTS OF OPERATIONS AND LIQUIDITY.

       Our response: We appreciate the comment by the staff and we will include
       in future filings under Item 8.A an assessment of materiality also with
       reference to results of operations and liquidity. We respectfully
       indicate to the staff that such assessment has already been included in
       Note 16 to the consolidated financial statements included in our Form
       20-F for the year ended December 31, 2004. Below we reproduce the
       disclosure made in such note under "Tax and Legal Contingencies":

       "The Company is party to claims with respect to certain taxes, civil and
       Labor matters. Management believes, based in part on advice from legal
       counsel, that the provision for contingencies is sufficient to meet
       probable and reasonably estimable losses from unfavorable rulings, and
       that the ultimate resolution will not have a significant effect on the

<PAGE>

Nili Shah
September 15, 2005
Page 3

       consolidated financial position as of December 31, 2004, although it may
       have a significant effect on future results of operations or cash flows."

ITEM 15 - CONTROLS AND PROCEDURES, PAGE 82

                  3.       WE NOTE THAT YOUR CHIEF  EXECUTIVE  OFFICER AND CHIEF
                           FINANCIAL OFFICER CONCLUDED YOUR DISCLOSURE CONTROLS
                           AND PROCEDURES "...WERE EFFECTIVE IN PROVIDING
                           REASONABLE ASSURANCE THAT THE INFORMATION WHICH THE
                           COMPANY WAS OBLIGED TO DISCLOSE IN THE REPORTS THAT
                           IT FILED AND SUBMITTED UNDER THE TERMS OF THE
                           EXCHANGE ACT WOULD BE RECORDED, PROCESSED, SUMMARIZED
                           AND REPORTED AS AND WHEN REQUIRED." THIS IS AN
                           INCOMPLETE DEFINITION OF DISCLOSURE CONTROLS AND
                           PROCEDURES PER RULES 13A-L5(E) AND 15D-15(E) OF THE
                           EXCHANGE ACT. PLEASE REVISE YOUR DISCLOSURE TO
                           CLARIFY, IF TRUE, THAT YOUR OFFICERS CONCLUDED THAT
                           YOUR DISCLOSURE CONTROLS AND PROCEDURES ARE EFFECTIVE
                           TO ENSURE THAT INFORMATION REQUIRED TO BE DISCLOSED
                           BY YOU IN THE REPORTS THAT YOU FILE OR SUBMIT UNDER
                           THE EXCHANGE ACT IS RECORDED, PROCESSED, SUMMARIZED
                           AND REPORTED, WITHIN THE TIME PERIODS SPECIFIED IN
                           THE COMMISSION'S RULES AND FORMS AND TO ENSURE THAT
                           INFORMATION REQUIRED TO BE DISCLOSED BY AN ISSUER IN
                           THE REPORTS THAT IT FILES OR SUBMITS UNDER THE
                           EXCHANGE ACT IS ACCUMULATED AND COMMUNICATED TO YOUR
                           MANAGEMENT, INCLUDING ITS PRINCIPAL EXECUTIVE AND
                           PRINCIPAL FINANCIAL OFFICERS, OR PERSONS PERFORMING
                           SIMILAR FUNCTIONS, AS APPROPRIATE TO ALLOW TIMELY
                           DECISIONS REGARDING REQUIRED DISCLOSURE. OTHERWISE,
                           PLEASE SIMPLY CONCLUDE THAT YOUR DISCLOSURE CONTROLS
                           AND PROCEDURES ARE EFFECTIVE OR INEFFECTIVE,
                           WHICHEVER THE EASE MAY BE.

       Our response: The intention was not to suggest that the necessary
       controls and procedures are ineffective. For the avoidance of doubt, and
       as you suggest, our future filings will contain the following disclosure
       (in pertinent part):

       "Based on that evaluation, the Company's Chief Executive Officer and
       Chief Financial Officer concluded that the design and operation of the
       Company's disclosure controls and procedures are effective to ensure that
       information required to be disclosed in the reports that the Company
       files and submits under the Exchange Act is (i) recorded, processed,
       summarized and reported within the time periods specified in Securities
       and Exchange Commission rules and forms, and (ii) accumulated and
       communicated to management, including the Chief Executive Officer and
       Chief Financial Officer, to allow timely decisions regarding required
       disclosure as of the end of the Company's most recent fiscal year."

<PAGE>

Nili Shah
September 15, 2005
Page 4

       REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, PAGE F-2

                  4.       WE NOTE THAT PRICEWATERHOUSECOOPERS AUDITORES
                           INDEPENDENTES MAKES REFERENCE TO ANOTHER AUDITORS'
                           REPORT. PLEASE FURNISH US WITH A COPY OF THIS REPORT
                           AND PROVIDE THE REFERENCED REPORT IN FUTURE FILINGS.

       Our response: We respectfully indicate to the staff that the report from
       Ernst & Young LLP on the consolidated financial statements of Gallatin
       Steel Company as of December 31, 2004 and 2003 was included as Exhibit
       15.01 of our Form 20-F for the year ended December 31, 2004 filed on June
       30, 2004. We have also reproduced such report as an Exhibit to this
       letter.

2.2 CURRENCY REMEASUREMENT, PAGE F-10

                  5.       TELL US UNDER WHAT CIRCUMSTANCES THE U.S. DOLLAR
                           AMOUNTS HAVE BEEN REMEASURED FROM THE FINANCIAL
                           STATEMENT EXPRESSED IN THE LOCAL CURRENCY OF THE
                           COUNTRIES WHERE GERDAU AND EACH SUBSIDIARY OPERATE.
                           EXPAND YOUR DISCLOSURES ACCORDINGLY.

       Our response: We have reviewed note 2.2 to our consolidated financial
       statements filed on our Form 20-F for the year ended December 31, 2004
       after your comment and realized that the term "translation" should have
       been used instead of the term "remeasurement". In future filings we will
       remove the reference to currency remeasurement and will be using the
       expression currency translation instead.

3.14 REVENUE RECOGNITION, PAGE F-14

                  6.       WE ASSUME THAT TITLE IS TRANSFERRED UPON DELIVERY.
                           PLEASE REVISE TO CLARIFY OR TELL US UNDER WHAT
                           CIRCUMSTANCE YOU HAVE RECOGNIZED REVENUE PRIOR TO
                           DELIVERY. REFER TO SAB TOPIC L3.A.3.A.

       Our response: We confirm that title is transferred upon delivery. We also
       confirm that Gerdau does not have sales transactions based on bill and
       hold arrangements addressed in SAB 104 Topic 13.A.3.a , or any other
       transactions where revenue is recognized prior delivery.

<PAGE>

Nili Shah
September 15, 2005
Page 5

16.2 OTHER COMMITMENTS, PAGE F-45

                  7.       DISCLOSE THE SIGNIFICANT TERMS OF YOUR LONG-TERM
                           SUPPLY AGREEMENTS.

       Our response: Our long-term agreements with suppliers have been entered
       into to facilitate a continuous supply of raw materials (mainly iron ore
       and chemical gases) and energy (electric and natural gas) in quantities
       expected to be used in the normal course of business.

       The main terms of our long-term supply agreements for each product or
       service acquired are summarized below:

       OPERATIONS IN BRAZIL

       The agreements establish minimum quantities and maximum quantities to be
       supplied by the third parties and purchased by us.

       Purchase price is determined: (i) by the electric energy regulator for
       contracts in plants where we are "Captive consumers" as defined for
       electric regulatory purposes (ii) originally negotiated between Gerdau
       and the electricity generator company and annually adjusted based on
       contractual indexes in plants where we are "Free Consumers", (iii) by the
       gas regulator for natural gas agreements, (iv) originally negotiated
       between Gerdau and the supplier and adjusted on an annual basis based on
       a contractually agreed formula based on price indexes with respect to
       industrial gases, and (v) adjusted on an annual basis by the supplier of
       iron ore based on change in prices in the international markets.

       Under current regulatory rules the Company may choose to change the
       electric generator company and the gas distribution company once the term
       of the existing agreements expires.

       Contracts can be terminated by either party, through the payment of a
       penalty.

       OPERATIONS IN THE UNITED STATES

       Most of the Company's minimills in North America operations have
       long-term supply contracts with either major utilities or energy
       suppliers. The electric supply contracts typically have two components: a
       firm portion and an interruptible portion. The firm portion supplies a
       base load for the rolling mill and auxiliary operations. The
       interruptible portion supplies the electric arc furnace power demand,
       which represents the majority of the total electric demand and, for the
       most part, is based on spot market prices of electricity.

<PAGE>

Nili Shah
September 15, 2005
Page 6

       We have concluded that our long term supply agreements are not
       unconditional purchase obligations and do not meet the characteristic (b)
       of paragraph 6 of SFAS 47 "Disclosure of Long-Term Obligations".

       As our long-term supply agreements do not meet all the characteristics of
       paragraph 6 of SFAS 47, we have concluded that the disclosure of
       significant terms of long-term obligation established by such standard is
       not applicable to our long-term supply agreements and for that reason we
       have not included such disclosures in our Form 20-F for the year ended
       December 31, 2004.

       However, as result of the comment by the staff we expect to include
       disclosure of significant terms of long-term supply agreements in future
       filings in the format and with the content included as part of this
       response.

23 SEGMENT INFORMATION, PAGE F-55

                  8.       DISCLOSE THE REVENUES FROM EXTERNAL CUSTOMERS FOR
                           EACH PRODUCT AND SERVICE OR EACH GROUP OF SIMILAR
                           PRODUCTS AND SERVICES. REFER TO PARAGRAPH 37 OF SFAS
                           NO. 131. IN THIS REGARD, WE NOTE YOUR DISCUSSION OF
                           PRODUCT CATEGORIES UNDER YOUR BUSINESS OVERVIEW
                           SECTION.

       Our response: We do not have information about revenues for each group of
       similar products and services available on consolidated basis and we have
       concluded that is not practicable to disclose such information for the
       reasons described in the next paragraph. We expect to include in future
       filings a statement indicating that providing such information is not
       practicable.

       Information about revenues broken down by groups of products or services
       is not captured in our accounting records. Information about sales by
       groups of products (including information on a product by product basis)
       used for management purposes is compiled, prepared, reported and
       followed-up based on volumes sold and not based on revenue. We have
       included such information on volumes sold by group of products under
       "Consolidated Shipments by Product Line" in page 34 of our Form 20-F for
       the year ended December 31, 2004.Considering the commodity nature of our
       business, sales targets are defined and measured in terms of volume of
       products sold by product or group of product and not in terms of monetary
       amounts. Management information on volumes sold by groups of products is
       extracted from databases from our sales systems in Brazil and prepared
       making simplifying assumptions for sales outside Brazil. However, no
       report is prepared for management purposes based on revenu