NEW YORK (AP) — Standard & Poor’s Ratings Services on Thursday it lowered
its corporate credit ratings for ArcelorMittal by one notch, saying that it
expects the steel industry to weaken as the economy continues to slow down.
S&P cut its long-term rating for the world’s largest steelmaker to “BB+”
from “BBB” and short-term rating to “B” from “A-3.” The outlook is negative.
U.S. shares of ArcelorMittal fell 11 percent.
S&P said the downgrades reflect the weaker global steel industry environment
and economic prospects, particularly in Europe, which prompted the ratings
service to cut its profit predictions for the Luxemburg-based company for
the rest of this year and 2013.
In addition, S&P said the 20 percent drop in steel and raw material prices
over the past two months shows that the industry environment is currently
weaker than previously expected. And the downgrades take into account
ArcelorMittal’s second-quarter results, which were lower than S&P expected
they would be.
Last month, ArcelorMittal said its second-quarter profit fell 37 percent,
hurt by the effects of Europe’s ongoing financial crisis.
In afternoon trading, ArcelorMittal’s U.S. shares fell $1.76, or 11 percent,
to $14.19. They traded at a 52-week low of $13.28 in early June.