Moody's: Stable outlook for Asian steelmakers in 2018
Moody’s Investors Service says that its outlook for Moody’s-rated steel companies in Asia through 2018 is stable, because profitability will be steady during this period, after improving significantly in 2017.
“The likely stable profitability for Asian steelmakers that we rate is underpinned by the removal of excess steel-production capacity in China and broadly steady demand in Asia as a whole,” said Kai Hu, a Moody's senior vice president.
Moody’s says that steel production capacity in China will continue to decline, due to the Chinese government's supply-side reforms and environmental protection measures. These factors will reduce the supply glut in Asia.
Moody’s said that China drives the outlook for steel companies in Asia because the country represents the region's largest steel consumer as well as producer.
“Overall steel demand in Asia will remain stable, with robust demand growth in South and Southeast Asia, and flat growth in China,” added Hu.