Iron ore rebounds as China boosts consumption measures

Iron ore futures recovered to CNY 795 per tonne, up from a two-month low of CNY 770 on March 10th, following a positive shift in other assets linked to higher economic activity in China.

Iron ore rebounds as China boosts consumption measures

This came after Beijing officials announced a series of measures to boost consumption. In addition to supporting manufactured goods, the measures are designed to address China's ongoing property crisis and prevent further developer liquidations, as China is one of the world’s largest steel consumers. However, expectations of slower steel output this year limited the rebound. The Chinese government also revealed plans to reduce steel production capacity, with markets speculating cuts of around 50 million tons annually.

China caps steel capacity to address overcapacity

These capacity caps aim to tackle concerns over overcapacity in blast furnaces and mills, exacerbated by weaker construction demand due to the property crisis and a reduced ability to export steel.