CRU: Evergrande—No Longer So Grand

By CRU Senior Economist Henry Hao and Principal Economist Alex Tuckett, from CRU’s Global Economics Outlook

Since China rolled out the “three red lines” policies, China’s second-largest developer China Evergrande (EG) has grown to be the most indebted with more than RMB1.97 tn of liabilities. Market investors are concerned that Evergrande will collapse and default on part of its debts. As the Chinese real estate sector is a huge consumer of steel, copper and aluminum, this poses risks to metal markets. In this Insight, we examine the development of the crisis, the risks that will emerge if default occurs, and possible scenarios.