S&P: situation with credit ratings of metallurgic companies in the short-run will be unfavorable

/News.kkb.kz, July 11, 03/ - In the short-run situation in the world market of steel and other metals will be unfavorable, mainly due to uncertainties relating to perspectives of global economy development, which doesn't allow growing of prices for the majority of metals, despite actions of producers, Standard&Poor's Rating services. Credit ratings of metallurgic and mining companies will lower in the short-run. At the same time exclusion in this situation would be gold, which favorably experienced dollar decline, and also nickel with its high demand on it. At the same time European market of metals will face some problems, which will lead to decrease of present prices. In 2003 in Europe the growth of production capacities by 2-4% is expected, despite the decline in production output of the largest production company Arcelor S.A. (BBB/"negative"/A3). Most likely, demand on metals in Europe will also dip due to fall of demand on cars, and decline of volumes of construction on key European markets. In addition steel prices in the USA declined substantially during last quarters and, thus, at present the difference in price on metric ton totals $80 between USA and Europe. Growth of Euro and high prices on products of European metallurgic companies attract import from Eastern Europe and Asia and hinder European producers for exporting from Europe. Accordingly, metals, typically designated for export, stay in Europe, which leads to decrease of demand on product. [2003-07-11]