Fitch Releases Special Report on Latin America Steel Industry.Business Editors CHICAGO--(BUSINESS WIRE)--April 23, 2003 Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. has published a detailed special report titled 'Latin American Steel Industry: 2002 Exceeds Expectations, but Risks Persist'. The report provides an in-depth review of how the region's key industry players are coping with weak local economies, global overcapacity o·ver·ca·pac·i·ty n. Too great a capacity for production of commodities or delivery of services in relation to actual need: the problem of overcapacity in many large industries. , tight credit markets, and global protectionism. The report also profiles some of the key companies in the major steel producing countries in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. . 'Latin American steel producers made it through 2002 performing better than expected despite facing one of the most challenging operating and business environments in Latin America during the last decade,' according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Anita Saha, Director - Latin America Metals & Mining Analyst and author of the report. 'Last year's Section 201 trade restrictions imposed by the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. on steel imports created fairly negative expectations for non-U.S. producers, that in reality, proved less damaging in 2002.' 'World prices for steel products such as hot- and flat rolled steel shot up as other countries imposed their own protective import restrictions to curb an influx of lower priced steel once destined des·tine tr.v. des·tined, des·tin·ing, des·tines 1. To determine beforehand; preordain: a foolish scheme destined to fail; a film destined to become a classic. 2. for the U.S.,' added Daniel Kastholm, Managing Director of Fitch's Latin America Corporate Group. 'Strong demand from alternative markets, particularly China, definitely helped the market last year as well.' The report also comments on how several Latin American steel producers in Mexico, Argentina, and Venezuela were negatively affected by weak local economic conditions and tight financial liquidity. In Mexico, three steel producers engaged in some form of debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: over the two years or so as a result of weak balance sheets, lack of financing flexibility and an adverse business environment. 'Clearly, credit risks for the sector will persist for the foreseeable future as a glut of overcapacity still hangs over the global steel market,' said Saha. 'Until governments allow free market forces to operate unfettered and prompt inefficient producers to exit the market, the pace of capacity rationalization and consolidation will likely remain less than optimal.' The new report is available on the Fitch Ratings web site at 'www.fitchratings.com' or by contacting Market Services at 1-800-853-4824. |
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