Russian, Turkish steel: BAML turns cautious as "risks are rising"

Eregli Demir ve Celik Fabrikalari

18/10/2019 13:25

** BofA Merrill Lynch is turning cautious on Russian and
Turkish steel companies, citing several global and domestic
risks factors for the stocks
    ** Says that the risk factors include Russia demand
slowdown, weaker demand in Europe and risk of overcapacity in
the U.S., political tensions between Turkey, U.S. and EU over
Syria, as well as seasonally weak steel demand in winter
    ** Downgrades Russian steel producers Severstal  CHMF.MM 
and NLMK  NLMK.MM  to "underperform" from "neutral"
    ** Cuts Russia's MMK  MAGN.MM  to "neutral" from "buy"
    ** BAML says that the risks for Russian steels include a
decline in the domestic premium to export prices back to normal;
decrease in coking coal and iron ore prices, and weaker steel
prices in Turkey
    ** Cuts Turkey's Erdemir  EREGL.IS  to "underperform" from
"neutral", as falling steel prices put more pressure on margins
in H2 2019 and H1 2020
    ** However, BAML upgrades Russian Evraz  EVRE.L  to
"neutral" from "underperform" due to its London Stock Exchange
listing



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