TEXT-S&P: Higher assumptions for Metals pricing in 2010-2012

(The following statement was released by the ratings agency)

Jan 22 - 

-The strong recovery in the market prices of metals in recent months is reflected in a criteria update titled "Standard & Poor's Revises Metals Pricing Assumptions For 2010-2012, But Keeps Long-Term Prices Unchanged," published today by Standard & Poor's Ratings Services.

"For 2010, we have increased our price assumptions by up to 30% for metals covered in this review since our last update on Oct. 2, 2009," said Standard & Poor's credit analyst Alex Herbert. "This reflects higher spot and futures prices, which in most cases have rebounded strongly in recent months. Higher prices appear to be driven by a recovery in demand due to improving economic conditions after the severe downturn in both the global economy and financial sector. Other supportive factors include the weakness of the U.S. dollar, and demand from financial investors."

This article supersedes "Standard & Poor's Changes Short-Term Metals Pricing Assumptions And Maintains Long-Term Price Decks," published Oct. 2, 2009, on RatingsDirect. Notable developments are an increase to our price assumptions for aluminum, copper, zinc, nickel, and gold in 2010, 2011, and 2012. Our long-term price assumptions are unchanged. We do not expect any near-term rating actions as a direct result of these updated criteria, which are effective immediately.

The scope of the update is unchanged and applies to all rated metals and mining companies that are active in the relevant metals. The article is related to our criteria article "Principles of Corporate and Government Ratings," published June 26, 2007, on RatingsDirect.