Fitch Rating Has Reported The Healthy 2013 Outlook for Steel-Consuming Industries

Reportedly, Fitch Rating has reported the healthy 2013 outlook for steel-consuming industries in CIS region.

Cost competitiveness and pro-cyclical ruble movements support the stable the metals and mining sectors.

For Russian market, the domestic consumption driven by construction and car sales will be more important than export consumption.

The major CIS steel producers remain operating high capacity as cash costs of their upstream operations continue to be 25%-30%.

For Ukrainian region, producer depending on lower value-added semi-finished steel products leaves them vulnerable to the downturn in 2013. For miners, steady funds flow from operations (FFO) and reduced capex flow (FCF) will improve cash generation.

Meanwhile, for steel producers, FFO will rise due to improvements in the ratio of raw material inputs to output prices.