RapidRatings Study Uncovers Steel Leaders and Laggards in New Trade Landscape
November 5, 2019
Financial health trends cut through trade war noise
New York, NY – November 5, 2019 – RapidRatings, the leader in financial health analytics, today released results of its latest industry analysis: Global Steel, which compares financial health trends of public steel companies in the US and its three major import sources exempt from tariffs — Brazil, Canada, and Mexico — to international steel companies amid rising trade tensions.
They study reviewed the RapidRatings FHR®, an analytic measured numerically on a scale of 0-100 representing the financial resiliency of a company, of 95 steel companies and found that the global industry has improved from a High Risk financial health standing to Medium Risk over the past several years.
Yet, signs of wear and tear are emerging, with the average global steel FHR dropping from 58 to 56 since the end of last year. Not surprisingly, the US and its major importers exempt from recent trade tariffs outshine the rest, holding a Low Risk financial health average.
“While the exact timing of another recession is hard to predict, downward sloping trends in financial health can be a tell-tale sign of deterioration to come,” said Libby Thomas, Senior Associate, Analytics of RapidRatings.
Sub-industry analysis demonstrated that, as a result of iron ore prices surging 68%, certain areas such as iron ore mining have benefited. However, the financial health of others, such as iron and steel mills and steel foundries, aren’t keeping pace.
“The more tariffs continue to upend traditional trade flows, the more monitoring the financial health of both public and private companies enables corporations to proactively spot red flags and strengthen supply chain ecosystems,” continued Thomas.
As global supply chains continue to destabilize and the costs of supplier failure are universally felt, benchmarking the financial health of all parties in the steel industry can signal early warning signs of distress and help to build supply chain resilience. For more information on RapidRatings’ Financial Health System and the Industry Analysis: Global Steel, download the full report here.
About the Industry Analysis: Global Steel
RapidRatings analyzed the financial health of 95 steel companies across the globe against a backdrop of resulting public company data and market capitalization data as of June 30, 2019. For the purposes of this analysis, the sector is defined by the following NAICS National Industries: iron and steel mills; iron ore mining; steel foundries (except investment); iron and steel pipe and tube manufacturing from purchased steel; rolled steel shape manufacturing; steel wire drawing; electrometallurgical ferroalloy product manufacturing; and iron foundries.
RapidRatings® sets the standard for financial health transparency between business partners, transforming the way the world’s leading companies manage enterprise and financial risk. RapidRatings provides the most sophisticated analysis of the financial health of public and private companies. The company’s predictive analytics provide insights into how third-party partners, suppliers, vendors, customers and securities issuers are likely to perform. For more information, visit www.rapidratings.com.
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