Moody’s: Metals and mining sectors among those with ‘moderate’ exposure to coronavirus fallout

As government entities in the U.S. battle to curb the spread of the coronavirus (COVID-19), incrementally stricter provisions on public gatherings have been implemented. Large businesses, from casinos on the Las Vegas strip to Disney World, have closed up shop.
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As of 4:00 p.m. CET (Central European Time) on Monday, the World Health Organization (WHO) reported 168,109 confirmed cases in 148 countries, including 6,610 deaths.

In light of the escalating health crisis, ratings service Moody’s took a look at the situation’s impact on various sectors, including steel and automotive, rating them according to level of exposure to the black swan event.
“A large number of sectors will be moderately exposed globally, often because of the secondary effects of the outbreak and in some cases trade in global commodities,” Moody’s wrote. “This applies in particular to the Oil & Gas and Metals & Mining sectors, which will suffer as a result of the fall in commodity prices.”
Moody’s rated sectors in terms of exposure to the situation, from high to low exposure. In the high exposure category were automotive manufacturers, automotive suppliers, global shipping, passenger airlines and more.
“Sectors reliant on trade and the free movement of people are most exposed, such as passenger airlines, shipping, and lodging & leisure, which includes cruise lines and restaurants,” said Benjamin Nelson, a Moody’s vice president and co-author of the report.
In the moderate exposure category were beverages, chemicals, manufacturing, steel producers, metals and mining, media and more.
In the low exposure category were pharmaceuticals, packaging, equipment and transportation, defense and more.
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However, the most recent Moody’s forecast offers its baseline scenario; in case of worsening conditions with respect to containment of COVID-19, the projections are worse for H2 2020.
“Our downside scenario assumes a significant increase in cases and public fear that the virus will not be contained in the first half of 2020, leading to extensive and prolonged restrictions on travel, quarantines, and multiregional closures of schools, factories, and businesses, along with a prolonged slump in commodity prices,” Moody’s wrote. “In this scenario, G-20 Advanced GDP growth is likely to fall to 0.5% in 2020, and G-20 Emerging GDP growth is likely to fall to 3.0%.”