일반산업
Assessment of Small-to-mid Sized Steel Firms
2010-03-05KIM, Eu-Gene
목차
요약
Assessment of the Recovery of the Steel Industry
The steel industry bottomed in Q1 2009 and is now recovering
Global crude steel production fell 8.0% YoY to 1.22 billion tons in 2009, but bottomed
in Dec. 2008 and has posted positive YoY growth since Sept. 2009. Inventory cycle indicators for domestic steel firms bottomed in Jan. 2009 and have grown YoY since Sept. 2009.
Operating margins for domestic integrated steel firms have risen to pre-recession levels, which suggests a recovery for the steel industry. Steel production and demand are both expected to increase 10% in 2010.
However, the low base effect is significant, and a complete recovery to pre-crisis levels is unlikely in 2010. Also, many downstream firms remain financial unstable and are posting losses, and thus warrant close analysis.
Financial analysis of small-to-mid sized steel companies
Electric furnace firms < Pipe makers < Processors < Cold-rolled & coated sheet makers
The average score for all small-to-mid sized steel firms was 25 points on a 100 point
scale. Each sector was substandard, averaging below 35 points, and the results were differentiated by firm size and sector.
Electric furnace firms are likely to recover the fastest while the cold-rolled and coated
sheet steel sector suffers from the lowest profitability and weakest financial structure.
The electric furnace sector is dominated by large firms and will benefit from the government'' s stimulus measures, which are focused on SOC investments. The number of firms in the steel pipe sector is not too high, but the firms vary sharply in terms of profitability and financial stability.
As a result, lending to small downstream firms that are underperforming should be controlled and monitored rigorously.
The steel industry bottomed in Q1 2009 and is now recovering
Global crude steel production fell 8.0% YoY to 1.22 billion tons in 2009, but bottomed
in Dec. 2008 and has posted positive YoY growth since Sept. 2009. Inventory cycle indicators for domestic steel firms bottomed in Jan. 2009 and have grown YoY since Sept. 2009.
Operating margins for domestic integrated steel firms have risen to pre-recession levels, which suggests a recovery for the steel industry. Steel production and demand are both expected to increase 10% in 2010.
However, the low base effect is significant, and a complete recovery to pre-crisis levels is unlikely in 2010. Also, many downstream firms remain financial unstable and are posting losses, and thus warrant close analysis.
Financial analysis of small-to-mid sized steel companies
Electric furnace firms < Pipe makers < Processors < Cold-rolled & coated sheet makers
The average score for all small-to-mid sized steel firms was 25 points on a 100 point
scale. Each sector was substandard, averaging below 35 points, and the results were differentiated by firm size and sector.
Electric furnace firms are likely to recover the fastest while the cold-rolled and coated
sheet steel sector suffers from the lowest profitability and weakest financial structure.
The electric furnace sector is dominated by large firms and will benefit from the government'' s stimulus measures, which are focused on SOC investments. The number of firms in the steel pipe sector is not too high, but the firms vary sharply in terms of profitability and financial stability.
As a result, lending to small downstream firms that are underperforming should be controlled and monitored rigorously.