AMERICAN DEPOSITARY SHARES
(Each American Depositary Share represents one-thousand (1,0001) deposited Preferred SharesShare)

THE BANK OF NEW YORK
AMERICAN DEPOSITARY RECEIPT
FOR PREFERRED SHARES, WITHOUT PAR VALUE PER SHARE
OF
GERDAU, S.A.
(INCORPORATED UNDER THE LAWS OF BRAZIL)

The Bank of New York as depositary (hereinafter called the "Depositary"), hereby certifies that __________________________________________________________, or registered assigns IS THE OWNER OF ____________________________________

AMERICAN DEPOSITARY SHARES

representing deposited preferred shares, without par value  (herein called "Shares"), of Gerdau, S.A., a company incorporated under the laws of Brazil (herein called the "Issuer").  At the date hereof, each American Depositary Share represents one-thousand (1,0001) SharesShare which areis either deposited or subject to deposit under the deposit agreement at the principal S?o Paulo, Brazil, office of Banco Ita? S.A., (herein called the "Custodian").  The Depositary's Corporate Trust Office is located at a different address than its principal executive office.  Its Corporate Trust Office is located at 101 Barclay Street, New York, N.Y. 10286, and its principal executive office is located at One Wall Street, New York, N.Y. 10286.

THE DEPOSITARY'S CORPORATE TRUST OFFICE ADDRESS IS
101 BARCLAY STREET, NEW YORK, N.Y. 10286

1.

THE DEPOSIT AGREEMENT.

This American Depositary Receipt is one of an issue (herein called "Receipts"), all issued and to be issued upon the terms and conditions set forth in the deposit agreement, dated as of September 18, 1997, as amended and restated as of March 8, 1999 , and as further amended and restated as of ___________, 2003 (herein called the "Deposit Agreement"), by and among the Issuer, the Depositary, and all Owners and Beneficial Owners from time to time of Receipts issued thereunder, each of whom by accepting a Receipt agrees to become a party thereto and become bound by all the terms and conditions thereof.  The Deposit Agreement sets forth the rights of Owners and Beneficial Owners of the Receipts and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time received in respect of such Shares and held thereunder (such Shares, securities, property, and cash are herein called "Deposited Securities").  Copies of the Deposit Agreement are on file at the Depositary's Corporate Trust Office in New York City and at the office of the Custodian.

The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made.  Capitalized terms defined in the Deposit Agreement and not defined herein shall have the meanings set forth in the Deposit Agreement.

2.

SURRENDER OF RECEIPTS AND WITHDRAWAL OF SHARES.

Upon surrender of this Receipt at the Corporate Trust Office of the Depositary, and upon payment of the fee of the Depositary provided in this Receipt, and subject to the terms and conditions of the Deposit Agreement, and any provisions of the Deposited Securities and other applicable laws, the Owner hereof is entitled to delivery, to him or upon his order, of the Deposited Securities or evidence of ownership of and title to such Deposited Securities at the time represented by the American Depositary Shares for which this Receipt is issued.  Delivery of such Deposited Securities or evidence of ownership of and title to such Deposited Securities may be made by the delivery of (a) certificates in the name of the Owner hereof or as ordered by him or the delivery of certificates properly endorsed or accompanied by a proper instrument or instruments of transfer to such Owner or as ordered by him  and (b) any other securities, property and cash to which such Owner is then entitled in respect of this Receipt.  Such delivery will be made at the option of the Owner hereof, either at the office of the Custodian or at the Corporate Trust Office of the Depositary, provided that the forwarding of certificates for Shares or other Deposited Securities or such documents evidencing ownership of and title to such Deposited Securities for such delivery at the Corporate Trust Office of the Depositary shall be at the risk and expense of the Owner hereof.

3.

TRANSFERS, SPLIT-UPS, AND COMBINATIONS OF RECEIPTS.

The transfer of this Receipt is registrable on the books of the Depositary at its Corporate Trust Office by the Owner hereof in person or by a duly authorized attorney, without unreasonable delay, upon surrender of this Receipt properly endorsed for transfer or accompanied by a proper instrument or instruments of transfer and funds sufficient to pay any applicable transfer taxes and the fees and expenses of the Depositary and upon compliance with such regulations, if any, as the Depositary may establish for such purpose.  This Receipt may be split into other such Receipts, or may be combined with other such Receipts into one Receipt, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.  As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, or surrender of any Receipt or withdrawal of any Deposited Securities, the Depositary, the Custodian, or Registrar may require (a) payment from the depositor of Shares or the presentor of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge or fee with respect to the Shares being deposited or withdrawn) and payment of any applicable fees as provided in the Deposit Agreement or this Receipt, (b) the production of proof satisfactory to it as to the identity and genuineness of any signature and (c) compliance with any regulations the Depositary may establish consistent with any laws or regulations applicable to Receipts and Deposited Securities, the provisions of the Deposit Agreement or this Receipt, including, without limitation, paragraph (22) hereof.

The delivery of Receipts against deposits of Shares generally or against deposits of particular Shares may be suspended, or the transfer of Receipts in particular instances may be refused, or the registration of transfer of outstanding Receipts generally may be suspended, during any period when the transfer books of the Depositary or the Issuer or the Foreign Registrar, if applicable, are closed, or if any such action is deemed necessary or advisable by the Depositary or the Issuer at any time or from time to time because of any requirement of law or of any government or governmental body or commission, or any securities exchange on which Receipts or Deposited Securities are listed, or under any provision of the Deposit Agreement or this Receipt, or for any other reason, subject to paragraph (22) hereof.  Notwithstanding any other provision of the Deposit Agreement or the Receipts, the surrender of outstanding Receipts and withdrawal of Deposited Securities may  be suspended  only (as permitted in General Instruction I.A.(1) to Form F-6) for (i) temporary delays caused by closing the transfer books of the Depositary or the Issuer or the deposit of Shares in connection with voting at a shareholders' meeting, or the payment of dividends, (ii) the payment of fees, taxes and similar charges, and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the Receipts or to the withdrawal of the Deposited Securities. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under the Deposit Agreement (i) any Shares required to be registered under the provisions of the Securities Act of 1933, unless a registration statement is in effect as to such Shares or such registration is not required or (ii) any Restricted Securities.  For purposes of the foregoing sentence the Depositary shall be entitled to rely upon representations and warranties deemed made pursuant to Section 3.03 of the Deposit Agreement and paragraph (5) hereof and shall not be required to make any further investigation unless it shall have received evidence that gives it reason to believe such representation and warranties are erroneous.

The Issuer may restrict transfers of the Shares where such transfer might result in ownership of Shares exceeding limits imposed by applicable law or the Estatutos Social of the Issuer.  The Issuer may also restrict, in such manner as it deems appropriate, transfers of the American Depositary Shares where such transfer may result in the total number of Shares represented by the American Depositary Shares owned by a single Owner or Beneficial Owner to exceed any such limits.  The Issuer may, in its sole discretion, instruct the Depositary to take action with respect to the ownership interest of any Owner in excess of the limitation set forth in the preceding sentence, including but not limited to, a mandatory sale or disposition on behalf of an Owner or Beneficial Owner of the Shares represented by the American Depositary Shares held by such Owner or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Estatutos Social of the Issuer.  Upon receipt of instructions from the Issuer pursuant to Section 3.05 of the Deposit Agreement, the Depositary will take any and all action reasonably practicable to execute such instructions.  The Depositary shall incur no liability to Owners or Beneficial Owners for carrying out any instructions received from the Issuer pursuant to Section 3.05 of the Deposit Agreement.

In furtherance and not in limitation of the foregoing, the Depositary shall not, and it shall instruct the Custodian not to knowingly (i) accept for deposit Shares where such Shares have been withdrawn from a restricted depositary receipt facility in respect of Shares established or maintained by a depositary bank, including any such facility established or maintained by the Depositary (hereinafter, a "restricted facility"), or permit such Shares to be used to satisfy any person's pre-release obligation, unless such Shares have been acquired in a transaction (a) registered under the Securities Act of 1933, (b) in compliance with Regulation S or (c) in accordance with Rule 144 under the Securities Act of 1933, and the Depositary may, as a condition to accepting the deposit of such Shares under the Deposit Agreement, require the person depositing such Shares to provide the Depositary with a certificate in writing to the foregoing effect; or (ii) accept for (w) deposit, (x) transfer or exchange, (y) cancellation or (z) delivery in satisfaction of any person's pre-release obligation, depositary receipts representing Shares issued pursuant to a restricted facility.

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