SMM5, March 13-S & P Global Ratings) reiterates its BBB- credit rating on ArcelorMittal, the world's largest steelmaker, which has a negative outlook and continues to be under pressure from weak markets. Rating agencies say the "trough" of steel demand has passed.
ArcelorMittal, the world's largest steelmaker, reported results for the first quarter of 2020 on Thursday. The company's sales fell 23 percent to $14.8 billion, with a net loss of $1.12 billion (7.95 billion yuan). In terms of production capacity, ArcelorMittal is still the first in the world, but production has been surpassed by China's Baowu.
The S & P global rating agency said in a statement that steel demand fell at an unprecedented level in April due to the pandemic of the new crown virus and the suspension of steel production in Europe and the United States, while demand for the rest of the year remained uncertain.
The agency has downgraded its financial performance forecasts for ArcelorMittal for the rest of the year in view of falling steel demand in the current quarter.
According to different market indicators, the inflection point of the crisis appears to have occurred in April, and a gradual recovery is about to begin. Macro data show that GDP in Europe and North America is expected to rebound to 5.6 per cent and 6.2 per cent, respectively, in 2021. Nonetheless, the form of recovery remains unclear. Overall, we expect steel production in Europe and the US to fall by 2-3 per cent by 2021 compared with 2019, the agency said.
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