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Dropping Like Flies: Largest Steel Maker In China's Shanxi Province Defaults On CNY 3 Billion In Debt
When we started discussing the upcoming onslaught of corporate defaults in "Minsky Moment" China, now that the bankruptcy seal has been broken, we warned that the worst is about to come.
Well, it's coming.
Overnight, Hong Kong's The Standard reported that in addition to the solar, coal and real-estate developer companies that are on everyone's radar as potential future bankruptcy candidates, one can also add steel makers to the list, with its report that Highsee Group, the largest private steel makers in Shanxi province has defaulted on CNY3 billion of debt, unable to repay its bonds on time.
According to The Standard, "Highsee Group's 3 billion yuan debt was overdue last week," the 21st Century Business Herald reported yesterday. "The company is running in red, and has failed to pay workers for months. Many of its furnaces have stopped operating."
The reason for this most recent collapse: the plunge of domestic steel prices , which have fallen to their lowest level in more than eight years in mid-March as a result of weak demand and a surge in output.
Earlier, Shanxi coal miner Liansheng Resources Group went bankrupt while its loans, which were packaged into a wealth management product distributed by China Construction Bank (0939), are likely to be bailed out. UBS Securities securities analyst Chen Li said it is the peak season for corporate debt dues. Up to 80 percent of the nation's trusts have obligations to meet within the second quarter, he added.
IBT adds that "Highsee Iron and Steel Group ... is just one of numerous steel mills facing issues in the country. Data from the National Bureau of Statistics revealed that China produced 2.22 million tonnes of crude steel a day over the first two months of 2014, Reuters reports. This record amount was manufactured even though demand wasn’t as strong."
It remains to be seen if Highsee is bailed out, however now that pretty much any corporation with exposure to the commodity and real estate space that has maturing debt is on the rocks, the PBOC may be better suited just to let the system cleanse itself, even if that means the collapse in both the Chinese stock market, which unlike the US is largely irrelevant (especially since it once again dropped below 2000 while the Hang Seng entered a bear market), but the bigger issue is that the Chinese housing bubble is set to burst both domestically and abroad, as we reported yesterday.
And lest readers are left with the impression that merely operational companies with direct exposure to the deleveraging carnage that is taking place in China - at least until such time as China unleashes another multi-trillion stimulus - are exposed, also overnight financial firm Southchina Futures announced it is terminating it business on "major operation risks."
About South China Futures Brokerage Co. closure announcement
As the Company has significant business risks, some of the bank account was frozen Guizhou Court of Justice, in order to protect the legitimate rights and interests of investors, the company passed a resolution to stop the shareholders' meeting brokerage business futures, now specific announcement is as follows:
First, the announcement issued by the date, the South China Futures Brokerage Co., Ltd. (hereinafter referred to as "the South China Futures") is no longer accepting new customers open positions instructions.
Second, within five working days of the date of this announcement, make customers to handle the South China Futures cancellation procedures.
Third, the five working days after the publication of the notice, did not apply for cancellation procedures futures customer account funds will be transferred to the unified Huatai Great Wall Futures Co., Ltd. (hereinafter referred to as "Huatai Great Wall Futures").
Fourth, since the date of this announcement within ten working days from customers willing to open an account at Huatai Great Wall Futures, futures and South China Huatai Great Wall Futures will jointly provide customers with convenient handle channel, during the South China Huatai Great Wall Futures futures and customer acceptance , Tel: South Futures, (020) 38791617 ; Huatai Great Wall Futures, 4006280888.
Notice is hereby given.
Dropping like flies now.
We wonder how long until the US stock market, floating in its cloud of manipulated, centrally-planned oblivious innocence, realizes that a China on the verge of all out deflationary recession is not a good thing?
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I think the problem is there's a lot less steel being used in flat screens and cell phones these days.
Carbon fiber.....that's the future.
One word..... Plastics......
http://www.youtube.com/watch?v=PSxihhBzCjk
Whopee were all gonna die!
They are letting their bad companies die......I like it.
"Well, it's coming."
When? When? When? It's tiring waiting for it.
I'm watching for the EU curve ball.
The EU curve ball will be the re-pricing of risk in the sovereign bond market. Oops.... we just realized that portugals and spain's government bonds didn't merit interest rates sub-4, which will just snowball the pending Yen carry margin call coming. BLAM.... shit really starts to hit the fans. Unfortunately, they will sell gold and us treasuries to probably buy $PLUG.
wallstreetapost... Maybe the central banks could buy the steel the same way they do with gold to keep the price of steel high???????????
I mean...the logic is flawless...central banks buy up all (Excess that might accidently end up in the streets.) the gold to prevent margin calls and to keep the price of gold high. The same could be done with steel?
Central banks could shuffle the steel back and forth to each other in a continuous process of buying it from each other to create the illusion of trade during periods of austerity and economic collapse. Ofr they could buy up the supply as it is being dug out of the ground, in much the same way they do with gold to keep the miners from going bust. Or to make it worthwhile digging it out of the ground.
Or their steel mining skills would get rusty...haha
Not often i crack a joke...
If the central banks can print enough money to buy billions of tons of steel, and if they can find a big enough steel vault (Haha, another joke), they could make steel prices soar in much the same way they have been able to achieve with gold.
If they can make it scarce enough, steel might overtake the price of gold making it necesarry to find means of making cars out of specially alloyed gold leaf or the like. Hmm...sounds like sci-fi..but anything is possible.
QE-Steel sounds marketable, and the problem of storage during inconvenient periods of austerity in a humungous steel vault so it cannot be stolen by thieves would solve the steal problem.....
There's fucking loads of steel. There's not very much Gold.
Now, if you'd have said Tungsten....
Manipulate the paper steel market, that's the ticket.
Nice one Dead Fred.....just 'steel' some paper.
Long dumb iron bombs...redistributing iron atoms back to the environmet from whence they came for over 100 years now.
medium giraffe, there are fucking loads of empty houses that have defaulted, empty stomachs, not very many full ones.
Now if you had said privately owned debt printing bankers......
But I wouldn't say privately owned debt printing bankers. Because there's fucking loads of those too!
"The CEO could not be reached for comment...from his $6.8 million Californai Mansion."
Goldsmiths could create a new super hard gold alloy by 'Steeling' the Gold, so it probably isn't as sci-fi as i first suspected earlier in my rant.
I guess they need to have all that excess inventory to steel the world later on.
Why not virtual steel? All the same benefits of QE-Steel without the storage issues. Of course, the humungous steel vault would put some of the real steel to use...
Steel is so 1920's...... especially good steel. Everyone loves the cheap recycled shit. I grew up in Bethlehem and the remains of the steel industry continue to decay. Besides.... since everyone on this planet thinks we will be living in flying cites within a decade.... steel wont work.. that shit is too heavy...
If by flying you mean falling off a financial cliff, steel should work just fine.
Steel is so 1920's...steel wont work...
Especially since Dr. Young has shown the twin tower double cylinder design is no match for a decades old direct energy device.
http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=5&ved=0CEQQ...
Can you say Jericho?
Confucious say:
Chicom steel rust faster than Swiss Steel.
Whose map is that -- and why is Taiwan on it?
good eye, good eye
Officially the Republic of China, Taiwan is governed by China. You ask the Taiwanese and they'll say differently.
Ask the Taiwanese and they'll tell you that President Ma is a China stooge. What they probably don't know is that he is also a Jesuit stooge.
Once the defaults start traveling closer to the coast and engulfs some ranking party members in the whirlwind they will cut the defaults loose? Every money crisis in history starts in the countryside and migrates to the urban areas where the real power resides? This one could have two groups? One mad group heading to the coast another group made leaving the coast.
Chinese don't distinguish much between good and bad. They go more along the lines of state-backed or not state-backed in making their decisions.
"Well, Brankfein, we forrow you advise, economy in big trouble. Now what we do?"
"I'll tell you for some of those shiny gold bars on your desk there, Wang Fu."
Once they learn to get over failure, the real global monster will arrive.
That is an incisive truth right there WB.
A large indian bank sold NPA's for the first time ever to a debt restructuring company last week.
A sign of what you said....interesting.
ori
Yes! Just like Flight 370 got swallowed by a black hole according to CNN:
http://www.mediaite.com/tv/cnns-don-lemon-is-it-preposterous-to-think-a-...
You can't make this shit up!
You can't make this shit up!
Actually....pretty sure they did.
I think that's the same excuse the FED is preparing to use once the Germans figure out that their gold actually isn't there any more:
"ehhh, sorry....it was swallowed by a black hole".
Here's my newest favorite investigative news source...comes sans black holes.
http://sharylattkisson.com
That is one of the best unintentionally funny vids I've seen in a long time. Thanks, HB. +1
Somebody is watching too much Star Truck.
More likely a black, mach3 heat seeker air-air.
Man, that one is a classic.
Dustbin Hoffman.
Did you say plasmatics?
http://www.youtube.com/watch?v=aR8fty2bGgw
Nice!
Wendy was a true American badass....
True, but demand for nails and nail guns is soaring
I was long operation manuals for nail guns but nobody seems to be reading those...
NOW I'M ALL IN ON STICKERS THAT SAY "MIND THE GAP"!!
I'm all in on widgets right now. They say they use in everything right now and the economy is booming!!!
Yes, never thought I would see the day when were driving plastic tractors, but here we are.
Plastic nails too... Plastic guns courtesy of Cody Wilson and Defense Distributed... Naturally leads to plastic nail guns... doh. Blythe bailed on commodities at the perfect time. Long Netflix and The Graduate regardless of Putin's Netflix account being embargoed. Steel is a barbarous relic.
Bah, who needs cold rolled steel when there is paper, paper covers steel scissors every time I have played and I make the fucking rules.
In most products they use LESS steel even where steel is required.
Maybe everyone needs a refresher course. It's all ball bearings nowadays.
http://www.youtube.com/watch?v=hm30l8sqlQw
Is DoChen hiring?
I just bought a carbon fiber road bike. It's five pounds lighter than my aluminum bike.
Chinese companies defaulting =
I know this one!
= NEW HIGH ON THE S&P!
sadly you're 100% right again...
Looks like Obamacare and 29.5hr/wk jobs is taking down China. Who can afford expensive crap from China anymore?
PRECIOUS PLASTICS!!!
IT SEEMS THE FED HAS OVER 6000 TONS STORED OF IT IN FORT WASTEDUMP!!!
See!!? You think I was joking above about plastics!?
Coo, coo, ca-choo, Mrs Robinson
Chance of a lifetime (It's a Wonderful Life)
http://www.youtube.com/watch?v=CJBbDW491V0
Wal-Mart, Home Depot, Target & all the rest of ChinaMartUSAs just got an extra 50% off from all their finest Chinese suppliers.
On a more serious & technical note, anyone who believes a) the Fed didn't know what would happen by firmly establishing the wind down of QE via tapering, and b) that the Fed will do anything but continuing to taper...
...hasn't been paying sufficient attention to the Fed's very real dilemma (so much so, that they fail to appreciate that the Fed has truly said, essentially, "you're on on your own, our Wall Street handlers; a little bit more ZIRP and 500 billion more of POMO - probably only until September to November of 2014, is the best we can do given our balance sheet, and then No More Soup For You, lest we go boom!).
Where did Belgium get the USD to buy it's GDP in US treasuries in two months? QE or Backdoor QE can't stop because the market demand for US Treasury paper isn't sufficient. If rates go up, supply goes up and it compounds.
If one subscribes to the possibility/probability that the Fed is risking/intending to literally fall on its sword and implode shortly (i.e. the next couple years, at most), QE as we know it may not stop.
Otherwise, from a mathematical & statistical viewpoint, it must.
Place your bets.
I, for one, can see their clear determination to at least try to stem their madness in an effort to unwind their already toxic & outsized balance sheet in a manner that gives them a chance to remain as a somewhat viable central bank.
hey... look.... CRONY COMMUNISM works just like CRONY CAPITALISM... you have a company... you go in debt ... you steal the money.... you claim bankruptcy.... THE TAXPAYER/CITIZEN GETS FUCKED.... another happy ending provided to you by BIG BROTHER GOVERNMENT. POLITICIANS WHETHER THEY BE COMMIES OR LIBTARDS... THEY ARE NOT ABLE TO MAKE IT IN A COMPETITIVE ENVIRONMENT. they use phrases like "investing" and other capitalist soudning words and phrases but they DONT HAVE THE BALLS TO REALLY COMPETE.. so they just STEAL IT.. KICKBACKS AND CAMPAIGN SCHEMES WORK JUST AS WELL AS SUCCESS. especially when youahve the AG in your pocket in the USSA...
We need global warming........we really really need it!
If we don't redistribute wealth.....we're all gonna die. If we can save just one banker....
You "esum'ed" it up.
At the same time, just a short time ago China was bragging about the number of billionaires they had. So, on one hand all these "fascist" organizations are looking around and saying "we don't have the money to pay creditors or employees"...at the same time, all the family members of insiders in those companies are buying up all the multi-million dollar homes in San Marino, Vancover, London, etc, etc...
I have nothing against Chinese being wealthy and they work hard and deserve it. But this uber wealth has all come on the back of a billion of the 99.9%'ers in China that work their ass off every day...and that is sad.
to comment on my comment...
...it would be as bad, if the uber wealthy Chinese were building multi-million dollar homes IN CHINA and employing Chinese people in the process. At least, it would support the cycle of money life. But to take that money, and do what the Chinese consider to be the only cool thing (i.e. buy property anywhere other than in China) then it just compounds the misery.
You are right about this....but it is ALL due to the common word in these two groups....
CRONY. Rule of law (real law) has no meaning any more.
This is like a house with termites. You don't know you have a problem till it's too late. Rotting from the inside.
Wonder if PMs are getting dumped to raise cash.
Let's be optimistic folks and get ready for open season on the political puppets around the world.
< meh > some things never change...
"Do you come from a land down under?
Where futures blow and men sunder? "
Shit just got real.
Remains to be seen whether the PBOC will let the system clean itself and make a hard reset. Maybe counterintuitive, but a collapse in their markets and some big bankruptcies will signal confidence in market-led, not central bank-led recovery, and the investors will flood back to pick up any worthwhile ventures for pennies. That's the way it should be, but who knows?
Stop it. I'm getting all misty.
Corruption runs every decision now, worldwide. Not much chance of an "honest reset." Too disruptive to the elites and their cronies.
Yeah. You're probably spot on mate. I thought the chicoms might play a different game considering the batshit craziness of the rest of the global markets, but they all seem to be humming to the same corrupt tune.
Yes. crooked accountants willing to cook the books love Chinese food.
"No MSG on the quarterly report, but put some of that RIVER pork on it".
Will the Chinese execute some executives by throwing them off a roof?
"That's not right"
Sum Ting Wong "Are you harbouring a fugitive?" Hu Yu Hai Ding "See me ASAP" Kum Hia Nao "There goes Stupid Man" Dum Dum Wa King "Small Horse" Tai Ni Po Ni "Did you go to the beach?" Wai Yu So Tan "I bumped into a coffee table" Ai Bang Mai Ni "I think you need a face lift" Chin Tu Fat "It's very dark in here" Wao So Dim "I thought you were on a diet" Wai Yu Mun Ching "This is a tow away zone" No Pah King "Our meeting is next week" Wai Yu Kum Nao "Staying out of sight!" Lei Ying Lo "He's cleaning his automobile" Wa Shing Ka "Your body odour is offensive" Yu Stin Ki Pu "Great" Su PahWell this is BULLISH - in a deflationary direction.
They can't Ctrl-P their way out of this without shafting the manufacturing base, the financial system and the currency. So forget about Yuan hegemony in any medium timeframe.
Last commodity deflation will be in gold imho and they'll not want to do that (naturally) but may be forced into it. Only provides better buying opps later I guess.
How come the AUD is holding up so well (after its sub 0.9 visit)? - looks like a sitting duck to me.
Because the RBA will raise interest rates to defend the AUD, to hell with the domestic real estate market. Most new apartments in Melbourne CBD are directly marketed at gooks so they'll be burning as many foreigners as their own.
Course they will, they'll defend an overvalued currency, that always works. Should be an entertaining correction in Aussie RE though in any event. Canada next?
I need more beer and popcorn.
At least with the Aussies involved we get a 24 hour show.
Long LZB.
RadioactiveRant...This is off topic, but in view of your cool name, visit this website if you are looking for very easy to use, cheap, isotope analaysis and detection gear. The people there will help get to know the easy to use gear if you are not allready in possesion of a gamma spectrometry kit to add to any geiger counters you may allready have. Great forum and the software and harware come from Sydney Au amongst other places.
http://www.gammaspectacular.com/index.php?route=common/home
Multichannel analyser software is free from Sydney edu
http://www.physics.usyd.edu.au/~marek/pra/index.html
It's a pretty sad statement when the 'communists' will let the free markets work and the 'capitalists' won't .
"I had to abandon free market principles in order to save the free market system." - George W. Bush
"One heck of a job Brownie."
One thing you can say about the 'decider', he left us a bunch of quotes we won't forget.
lol this clown isn't even done yet and look at the zingers we have already...
http://www.brainyquote.com/quotes/authors/b/barack_obama.html
I went in there and didn't think I'd ever make it back out.
What year is this?
fool me once...
Mission accomplished
Maybe China has decided that the first country to "puke out" their rotten economy and then start to get well will end up on top. China can probably do this better/quicker than anyone else because of their government state. The US is so pansey-assed they will never puke it out. Just drag down lower and lower.
We need to "puke it out "and get it over.
Bullish for Iceland then.
Clearly you have not been reading Hank Paulson's post statute of limitations self-congratulatory rhetoric. He saved you. He saved your grandkids... Otherwise you'd be autotuning "hide your kids, hide your wife" on YouTube in Chinese. show some gratitude.
I see, Highsee, no be.
Overcapacity ...
Bankrupt is one of the nasty things you can expect would happen to you when producing things nobody wants to buy
Bankrupt is one of the nasty things you can expect would happen to you when producing things nobody can afford to buy Fixed it.
Time to build another ghost city. That should keep the locals from rioting.
MiddleKingdomFUBAR.
Does Lauren Lyster swallow?
she's on TV
If any of these companies have any Communist party investors...I bet they get bailed out....they claim they want to end corruption..but i doubt they will when it affects their pocketbooks...
new corporate form coming to china: good company/bad company.....all debts get moved to the foreign equity holders; all reall company assets get moved to 'special shares' owned by party members.
ive told people over and over for the past several years....when its good china will let you in, let you build your biz with a 'partner', learn your tech/operations, then when it gets bad, they show you the door. you only have property rights until the party says you dont.
This can't be true. I'm watching CNBS and they aren't saying anything...
They are all busy giving Warren his morning knob job.
Like these Commies weren't going to end up with everything FUBAR'd.
Its only fiat.
The physical plant remains, so what is the problem exactly ?
Petkov came running into my office. He leaned on my desk panting...,
"Deflation is coming!" he gasped.
"Why should this flation you speak of threaten the Motherland>?" I replied. "Take your machine gun and go kill it!"
China can go suck it - fucking scumbag communists.
Now let's see if GS and JPM start warehousing in Detroit again to keep commodities priced high - make the world a better place - take your car and run over a bankster today!!!!
How are people playing this unwind on the stock market? Short copper? Short China banks?
long gunpowder
Long helium balloons...
Man on the street...
I was told yesterday from a Port of Los Angeles employee that port traffic has dropped to 15.2 (movements per day) which is lower than any other time since 2008.
What kind of recovery sees y/y falls of 8.97% at the nations biggest port? http://www.portoflosangeles.org/maritime/stats.asp
More than 8.9% of that port traffic went to Mexican ports (its cheaper to hire Mexicans without Lois Lerner & Baraq o bama )
August 12, 2014...
Hedge fund collapse as Chinese off book derivatives revealed. "Golly, we had too much!" Says FIG.
It will likely improve the air quality! ;-)
Bankruptcies in China, even with some of the world's cheapest labor?
It's a mad, mad, mad world.
You better load up on the cheap chine while you still can find it and afford it?
Cause will are going out a business everything most go! Great STEELY DAN
Check in mair....rittre bit rate....
A busy sailor is a happy sailor fair and following lads
i blame the weather!
bullish for coal & steel, prices going up, you can't undercut everybody without "donor investors" and donor investors are running out of OPM.