Negative Outlook for Steel Industry: Moody’s

Moody’s has chopped its 12-18 month outlook for the global steel industry to negative from stable, citing “weakened economic conditions, accelerated demand contraction globally, ongoing price contraction and still high cost platforms” which will inhibit performance and decrease financial flexibility. LatAm steel companies are realizing the constraints they will face. For instance, in early November, Gerdau announced that in light of the deteriorating situation of the global economy, it would seek synergies and to increase efficiencies and competitiveness to adjust to fluctuations in markets. Meanwhile, Usiminas said in late October that it may consider cutting output as demand falls.