Credit rating agency sees upside for Brazilian steelmakers

Friday, 05 April 2019 23:45:28 (GMT+3)   |   Sao Paulo
       

Credit rating agency Standard & Poor's (S&P) sees upside potential for several Brazilian steelmakers, an executive said this week in São Paulo during an industry event.

Diego Ocampo, senior director and sector specialist at S&P, said during the S&P Global Platts Steel Markets Latin America Conference (SMLA) there is upside potential for Companhia Siderurgica Nacional (CSN), flats producer Usiminas, and Gerdau.

Ocampo said debt maturities for some of these steelmakers are “manageable,” with some concentration for CSN. Ocampo also made several remarks offering a macro perspective on the market.

He said trade frictions support buoyant domestic steel prices and volumes, adding that = long-term prices should be driven by China’s capacity cuts, while raw material price volatility trends tend to be limited but event-driven, as in the case of Vale’s dam failure. 

Ocampo said the outlook for the local steel sector remains somewhat positive.

“I don’t see a global threat that could affect the steel’s industry perspective. Brazilian steel exports, mainly to the US, show a good perspective. China’s economy is still growing, but their steel capacity is declining. And companies like CSN that export iron ore could make a bit more money (due to the Vale incident),” he said.


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