International credit ratings agency Moody’s has changed the outlook on South Korea-based Hyundai Steel Company's rating from stable to negative due to slower demand in China expected in 2020 and further unfavourable conditions in the global vehicle market.
In the January-September period, Hyundai Steel’s consolidated operating income dropped 38 percent, reflecting weak steel prices and expensive raw materials, subdued demand in the local market and the weak performance of overseas subsidiaries. “Weak operating conditions in Asia's steel industry will likely persist in 2020 because of slowing demand growth in China and softening conditions in key end-markets, such as the global auto and domestic construction sectors,” Moody’s said in its report. Though raw material prices are expected to go down next year, the producer will not be able to increase profitability, which fell by 20-25 percent in 2019, Moody’s stated.
