Global Growth Has Metals Prices Gleaming May 07
Standard & Poors, May 2007
Abstract
The global economy keeps chugging ahead and, with it, so does demand for nickel, copper, iron ore, bauxite, and other metal. In 2006, worldwide GDP increased at a 5.4% annual rate (on an IMF purchasing-power basis), equaling its previous high in 2004, and that has meant more manufacturing, much of which involves metals. While financial market speculation drives some of the day-to-day volatility in metal prices, Standard & Poor's Ratings Services believes that the underlying dynamic of increased demand without increased production remains the primary reason for the sharply higher prices we've seen recently. This combination of strong demand and weak supply has strengthened the credit quality of mining and metal companies around the world, and we don't foresee any...
Companies mentioned in this report are:
- Alcoa Inc.
- Freeport-McMoRan Corp
- Freeport-McMoRan Copper & Gold Inc.
- ArcelorMittal
- Tata Steel Ltd.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
- Alcoa Inc.
- Freeport-McMoRan Corp
- Freeport-McMoRan Copper & Gold Inc.
- ArcelorMittal
- Tata Steel Ltd.
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