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Industry Report Card: U.S. Metals & Mining Prices Are Strong Generally, But Demand Varies Nov 06
Standard & Poors, Nov 2006
Abstract
As metal prices continue their remarkable run, credit ratings on metals and mining companies around the world have improved, albeit at a slowing rate. Ratings are benefiting from the combination of stronger operating cash flow sectorwide and issuer-specific measures to reduce debt. Yet, ratings are becoming increasingly constrained by individual companies' business risk profiles, which reflect the highly competitive, volatile markets and other risks of these industries. Furthermore, the strength of the metals cycle has generated exceptional liquidity for metal producers, compelling companies to engage in any combination of debt reduction, M&As, and shareholder-friendly initiatives. Although fundamentals remain sound for most metals, some significant risks exist. First, as China has represented the bulk of marginal demand in recent years, any...
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.
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