S&P's Siderúrgica Nacional, National Steel ratings unaffected

Standard & Poor's said its ratings on Brazil-based Companhia Siderúrgica Nacional (BB/stable), as well as the rating on National Steel SA (B+/stable), are not immediately affected by the accident that occurred Sunday at Siderúrgica Nacional's steel mill in Volta Redonda.

The accident affected production of the mill's blast furnace #3, which is accountable for about two-thirds of its pig iron production. S&P said the extent and severity of the damages, as well the extent of production interruption, have not yet been determined.

While the company counts on intermediary slabs stocks that would suffice if repair and remediation are concluded quickly, a prolonged furnace production interruption would require Siderúrgica Nacional to acquire slabs in the spot market to feed its stripping mills, reducing profitability somewhat from its current very strong levels, the agency said.

Assuming that production is only temporarily interrupted, S&P said it does not expect Siderúrgica Nacional's credit quality and fundamentals to change due to the accident.

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