FX.co ★ Iron Ore Falls to 2-Month Low

Iron ore futures have declined to below CNY 760 per tonne in March, marking the lowest point in over two months, as demand appears increasingly sluggish. Recent data indicates a 9.8% annual drop in housing investment in China for the year, alongside a decrease in new home prices compared to the previous month. This has heightened concerns that the country's property downturn has not yet reached its lowest point. These developments threaten to trigger further liquidations among major property developers, who are significant global consumers of steel. Furthermore, protectionist policies among key trading partners of China are likely to hinder metal producers from compensating for weaker domestic demand. In response, the Chinese government has hinted at potential reductions in steel capacity this year, with the market anticipating measures that would eliminate 50 million tons of steel from the supply chain.