Corporate bond default indicates potential financial risk in Chinese aluminium industry - CRU Corporate bond default indicates potential financial risk in Chinese aluminium industry - CRU CRU reported that as another aluminium products manufacturer defaults on its corporate bond interest payments, the trend for the aluminium industry in China continues. Companies have defaulted on at least 20.7 billion yuan (USD 3.19 billion) in yuan bonds and USD 350 million in dollar debt in the six months through June, marking a 40% increase compared to the same period last year. In this Insight we explore the reasons for this trend and discuss why defaults could be seen as progress for China. On 14 June, Zhongrong Shuangchuang Beijing Technology 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 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 (USD 3.19 billion) in yuan bonds and USD 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. Meanwhile, 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. Source : Strategic Research Institute, SteelGuru
There is an increasingly worrying trend of Chinese aluminium manufacturers defaulting on their corporate bond interest payments. The companies have now defaulted on at least CNY20.1bn ($3.19bn) in yuan bonds and $350m in dollar debt for H1 2018, up 40% YoY.