CRU: Corporate Bond Default Indicates Potential Financial Risk in Chinese Aluminium Industry

Aluminium rolling mill has defaulted on interest payments
On 14 June, Zhongrong Shuangchuang Beijing Technology Group (formerly Zouping Great Wall Group) defaulted on interest payments for its RMB 600 million corporate bond, which was issued on June 2016. Amongst other business ventures, the company produces aluminium rolled products. Pre-Sensitized (PS) plate and foil are the main aluminium rolled products they produce. The company issued RMB 600 million and RMB 800 million corporate bonds in September 2016 and August 2017, respectively.

This is just one example, from the aluminium industry, of a growing trend in China. Companies have defaulted on at least 20.7 billion yuan ($3.19 billion) in yuan bonds and $350 million in dollar debt in the six months through June, marking a 40% increase compared to the same period last year. The data was compiled by Nikkei from Shanghai DZH and other sources.

Rise in prices helped aluminium companies in 2017
China has made headway in the past two years in stabilising its debt burden. The supply side reform in steel, coal and aluminium industries have driven the rise in commodity prices, which has buoyed profits at struggling steel, coal and aluminium companies, specifically State-Owned Enterprises (SOEs).

Read the full story: https://www.crugroup.com/knowledge-and-insights/insights/2018/corporate-bond-default-indicates-potential-financial-risk-in-chinese-aluminium-industry/ 

Read more about CRU: http://bit.ly/About_CRU 

About CRU

CRU offers unrivalled business intelligence on the global metals, mining and fertilizer industries through market analysis, price assessments, consultancy and events.

Since our foundation by Robert Perlman in 1969, we have consistently invested in primary research and robust methodologies, and developed expert teams in key locations worldwide, including in hard-to-reach markets such as China.

CRU employs over 260 experts and has more than 10 offices around the world, in Europe, the Americas, China, Asia and Australia – our office in Beijing opened in 2004.

When facing critical business decisions, you can rely on our first-hand knowledge to give you a complete view of a commodity market. And you can engage with our experts directly, for the full picture and a personalised response.

CRU – big enough to deliver a high-quality service, small enough to care about all of our customers.