Iron-ore extended its rout as BHP Group warned it sees an increasing likelihood of “stern cuts” to China’s steel output this year.
The prospect of much lower steel production in the second-half is “testing the bullish resolve of the futures markets”, BHP wrote in a commodities outlook report on its website. Iron-ore in Singapore has plunged by a third since spiking to an all-time high in May.
China’s steel industry is under pressure after pledging to reduce output this year, a goal that requires huge second-half curbs to offset booming output earlier in 2021. Production in July was more than 8% lower year-on-year, data on Monday showed.