International credit rating agency Standard & Poor's (S&P) has announced that it has lowered its rating for German steel distributor Kloeckner to 'B' from 'B+', with a stable outlook.
S&P stated that the downgrade reflects German steel distributor Kloeckner's very weak performance in the first nine months of the current year, due to the continued decline in steel prices and very limited pricing power, which was well below S&P’s previous expectations that assumed a recovery in the second half of the year. However, the stable outlook reflects S&P’s expectation that Kloeckner's operating performance will improve starting from the second quarter of 2016, up from a likely very weak full-year 2015. This assumes steel prices stabilize at the current low levels, without further negative inventory impacts from price declines.