International ratings agency Standard & Poor's has provided the reasons behind its downgrades of North Asia's three largest steelmakers, namely China's Baosteel, Japan's Nippon Steel & Sumitomo Metal Corp. and South Korea-based POSCO.
In October this year, S&P downgraded these three steelmakers by one notch, explaining that the ratings on each company no longer reflected the steelmakers' operating performance, which has steadily declined over the past two years and is not expected to return to the same level it had been before the declines began.
The rating agency pointed out that the companies' credit profiles have weakened significantly and are unlikely to recover sharply over the next 12-18 months. S&P sees further significant deterioration in steelmakers' operating performance unlikely, expecting their operating profits to recover modestly year on year.