FX.co ★ Iron Ore Extends Losses on China Steel Output Cuts

Iron ore futures fell to approximately CNY 763.5 per tonne on Wednesday, reaching a six-week low, following news that China plans to limit steel production. Steel manufacturers in Tangshan are expected to reduce their sintering output by 30% starting August 25 and cut blast furnace production by 40% beginning August 31. These reductions are not as drastic as initially anticipated, with earlier market predictions suggesting a complete shutdown. Additionally, upcoming transport restrictions across the Beijing-Tianjin-Hebei area are likely to further impact iron ore shipments, intensifying the strain on demand. Concurrently, BHP Group reported its lowest annual underlying profit in five years, amounting to $10.16 billion for the fiscal year ending June 30, which reflects a 26% decrease from the previous year, attributed to weaker demand from China. China is responsible for around 75% of global seaborne iron ore imports and produces slightly more than half of the world's steel.