The credit rating agency revised its outlook on Fortescue to "stable" from "negative" on Monday and affirmed its "BB" corporate credit rating on the company and the issue ratings on its debt.
It came as agency Fitch Ratings also affirmed its long-term issuer default rating at "BB+'" and revised the outlook to "stable" from "negative". Last week Moody's upgraded Fortescue's corporate family rating to Ba2 from Ba3.
S&P Global Ratings credit analyst Sam Heffernan said the revision followed the iron ore miner's 2016 financial year results, in which it reported a net profit after tax of $US985 million in the year to June 30, up 212 per cent from a result of $US316 million a year earlier.
"We revised the outlook to stable because of Fortescue's improved resilience to lower iron ore prices, given the company's further cuts in production costs and repayment of a significant portion of debt over the year ended June 30, 2016," Mr Heffernan said in a statement.
"Fortescue is now one of the lowest-cost iron-ore suppliers to Asia, mainly to China," Fitch said.
The rating agency said it expected "heightened volatility" to continue to affect iron ore spot prices but given the price strength so far this calendar year.
S&P said a number of factors could sustain higher iron ore prices over the next few months, including the current positive momentum in China's steel sector, some delays in the ramp-up of new capacity, normal levels of inventories at China's main ports and the low utilisation rate of China's small-to-midsize iron ore mines.
However it expects iron ore prices to soften in 2017 as the impact of Chinese government stimulus measures fades and producers continue to drive down their costs.
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