On May 16, 2012 rating agency Fitch Ratings affirmed company's Long-Term (LT) Issuer Default Rating (IDR) at BB+, Short-term (ST) IDR at ‘B’, Local Currency LT IDR at ‘BB+’, National LT Rating at ‘AA(rus)’. The ratings outlook was changed to negative from stable.

In its press release Fitch notes healthy performance of the main steel consuming industries in Russia, construction, automotive and pipe production, in 2011, which resulted in increase of apparent steel products consumption by 16% in 2011 y-o-y. Demand-driving factors in steel consuming industries will likely remain strong in medium-term perspective. At the same time steel products' price dynamics have been negative since May 2011, which explains the squeeze in margins for steel producers.

Despite the change in outlook, Fitch notes that: “MMK finalised in 2011 two scaled investment projects – construction of steelmaking and rolling facilities in Turkey with annual production capacity of 2.3m tons and the first stage of Rolling Mill 2000 with annual production capacity of 2.0m tons. This considerably strengthens the company’s position as a producer of high value-added steel products and improves its geographic diversification of assets and revenues”.

The agency estimates that MMK’s slab cash costs will decrease in 2012 vs. 2011 following the re-negotiating of iron ore price formula under contract with ENRC, its main iron ore supplier. This, along with the expected decrease of capex, will boost the company’s free cash flow.