OAO Novolipetsk Steel, OAO Severstal (SVST) and OAO Mechel (MTLR) were cut to “underperform” at Credit Suisse Group AG, which said it expects steel demand and prices to be weaker in the second quarter compared with the first.
Prices are also unlikely to rise in the second half of the year, Credit Suisse analysts Semyon Mironov and Dmitry Glushakov said in a report today.
“Low-cost emerging market steel producers, primarily in Russia, Ukraine and Brazil, are likely to try to improve returns through better capacity utilization and putting pressure on global steel prices,” they said.
The bank also lowered its estimate for Russian steel prices and said benchmark domestic hot-rolled coil is expected to average $357 a metric ton in 2009, and $368 a ton in 2010.
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