Fitch: Russian steel credits strengthening

Fitch Ratings said the credit profiles of the top Russian steel makers are strengthening due to a combination of healthy steel market conditions, domestic economic growth and increased vertical integration, which may lead to improved rating profiles in the future.

The major Russian steel manufacturers are MMK (BB-/stable), Mastercroft (Evraz Securities SA - B/B/positive) and Severstal (B+/B/A(rus)/RWN).

Robust Chinese demand, which accounted for about 28% of global steel consumption in 2004, has led to sharply higher selling prices, with export prices from the CIS to the Far East rising by about 72% in 2004 to about $487 per tonne. At the same time, improved economic growth within Russia has helped to increase domestic steel demand, which rose by about 7% in 2004.

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