Brazilian’s major steelmakers to face challenges in 2017, Moody’s says

Brazil’s major steelmakers should continue facing challenges amid weak macroeconomic fundamentals, credit rating agency Moody’s said this week.

Companhia Siderurgica Nacional (CSN), longs producer Gerdau and flats steelmaker Usiminas will continue facing challenges in the on-going year, reflecting the still-weak confidence level of the industry, the existing gaps in the local industrial production and the still bearish expectations for Latin America’s largest economy.

Moody’s said Brazil’s three major steelmakers face a prolonged period of weak credit metrics, with no visible signs of recovery in 2017.

According to Moody’s, Brazil’s domestic demand for steel has fallen, at the same time credit diminished for consumers, along with high interest rates, which are unlikely to improve the country’s industrial production.

Adding to the local steel industry’s woes is the fact the heavy and home construction markets, which together account for about 40 percent the country’s total steel consumption, also faced a strong downturn last year.