October 11, 2008

S&P foresees favorable midterm scenario for steel

BNamerica reported that Standard & Poor's foresees a favorable scenario for international steel markets in the midterm thanks to continued positive demand.

Mr Reginaldo Takara corporate and government services director during a presentation at an event in São Paulo promoted by UK based business conference organizer International Business Communications said that “However, some vulnerability could occur in 2008 due to increasing uncertainty in the global economy. It is hard to predict what will occur.”

According to Mr Takara, the increasing value of raw materials such as iron ore, in addition to higher equipment costs take a hit on the margins of steel makers worldwide.

He however said that “Meanwhile, market conditions look positive for Brazil in the long term since the country has low production costs. However its portfolio is small scale and not diversified in the context of global movements toward consolidation, which result in large international groups.”