Moody's: Asian steel view stable

Moody's Investors Service said it maintains a stable rating outlook for the Asian steel sector as market conditions in China and global consolidation trends remain the key themes for the sector.

Although near term fundamentals remain supportive for the sector, the potential for event risk is significant due to the effects of an ongoing global consolidation trend, particularly in Asia, where production has long been highly fragmented, Moody's said.

The industry faces significant event risk as it continues to undergo a high level of consolidation activity, but this will likely have positive effects for the industry as a whole over time, the agency said.

However, companies have shown a willingness to take on debt to finance these activities, Moody's said, and how they manage growth while maintaining balance sheet strength will be a key rating factor going forward.

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