Insight

China: Debt burdens driving steel into bankruptcy

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Report summary

China s steel plants are facing increasing pressure from growing credit tightness. Many steel plants are heavily indebted and dependent on short term debt. As a result a number of steel plants defaulted on their loans the effect of which is felt far beyond the local economy in which the steel plant operated. In this insight we investigate the reasons for this new trend and the implications of the potential for more defaults.

What's included

This report contains

  • Document

    Credit tightness.xls

    XLS 241.00 KB

  • Document

    China: Debt burdens driving steel into bankruptcy

    ZIP 381.18 KB

  • Document

    China: Debt burdens driving steel into bankruptcy

    PDF 530.36 KB

  • Document

    China: Debt burdens driving steel into bankruptcy

    ZIP 1.02 MB

Table of contents

  • Executive summary
  • Credit availability dries up as money supply tightens
  • Rising short term debt increasing vulnerability to a credit shock
    • Table 1: Examples of steel companies bankrupt in 2013
    • Table 2: Struggling steel companies, Q1 2014
  • Implications

Tables and charts

This report includes 5 images and tables including:

Images

  • Chart 1: M2 and steel sector capacity growth, 2007-2013
  • Chart 2: Chinese steel: Rising debt, rising risk
  • China: Debt burdens driving steel into bankruptcy: Image 3

Tables

  • China: Debt burdens driving steel into bankruptcy: Table 1
  • China: Debt burdens driving steel into bankruptcy: Table 2

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