Jun 2 2010
The Brazilian steel industry experienced a swifter rebound in volume demand compared to most developed markets, mainly due to the global recession being shallower and shorter-lived in Brazil, according to a Fitch Ratings report.
Overall, domestic steel producers recovered from the tough operating conditions experienced during the 2009 global credit crisis during which demand fell and financial and credit metrics were temporarily pressured. The three Fitch-rated Brazilian steel companies, Companhia Siderurgica Nacional (CSN, long-term Issuer Default Rating [IDR] 'BBB-'), Gerdau S.A. (Gerdau, long-term IDR 'BBB-') and Usinas Siderurgicas de Minas Gerais S.A. (Usiminas, long-term IDR 'BBB-'), exhibited swift recoveries in their operations. This compares favorably with many of their global peers which are still languishing.
Brazilian steel volumes are recovering and Fitch views Brazil's longer-term trends as positive. Revenues are expected to demonstrate greater improvement for the remainder of 2010 due to anticipated increases in steel prices as producers pass on recent price increases for iron ore to their customers. Fitch also expects further improvements in profitability levels and leverage ratios.
Fitch's special report 'Brazilian Steel Volume Rebound' highlights the main drivers and indicators of the recovery for CSN, Gerdau, and Usiminas, such as capacity utilization levels, steel sales volumes, steel prices, revenues, profit margins, and leverage ratios. The full report is available on the Fitch Ratings' website.