S&P lowers Nippon Steel & Sumitomo Metal

Standard & Poor's said it lowered the long-term corporate credit and debt ratings on Nippon Steel & Sumitomo Metal Corp. to BBB from BBB+.

Low steel prices have slowed a recovery in the steelmaker's earnings, reducing the likelihood that the company will swiftly improve its financial risk profile, which worsened when Nippon Steel Corp. and Sumitomo Metal Industries Ltd. merged earlier this month, S&P said.

The outlook is stable, reflecting that although business conditions for the company are deteriorating, its earnings and financial standing will gradually improve after bottoming in fiscal 2012 as benefits from the merger eventuate, the agency said.

The company maintains a strong business risk profile and has a diverse product lineup, ranging from automotive steel to high-grade seamless steel pipes for the energy industry, S&P said, and solid customers.

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