It’s reported that Fitch Ratings has downgraded steel giant Posco’s long-term Issuer Default Rating (IDR) and senior unsecured rating to “BBB+” from “A-“. Meanwhile, the short-term IDR was at “F2.”

In 2011 and 2012, high levels of debt to fund investments and weakened profitability were the main reason to drag down the ratings. The uncertainty in steel industry next year also reflected the outlook.

Posco’s fourth quarter earnings are expected to deteriorate further, reflecting the lower steel market.

Its debt levels rose due to fund wheavy capex, acquisition of Daewoo International and other capital.

However, compared with other steel producers, Posco remains the lowest-cost one in North Asia.