China’s move to support domestic iron ore miners to fuel new price declines

摘要

The Chinese government said it would cut resources tax rate for Chinese iron ore producers from 80% to 40% starting from May 1. Players believe, however, that the move will only lead to further deterioration of the commodity. Although the decision was long-expected as more and more miners were reported to be cutting or suspending operations in China, the tax reduction leaves no hope that the market will come into more balanced supply-demand environment. Iron ore prices have fallen by over 67% since the beginning of last year pressured by oversupply.