China vows greater iron ore self-sufficiency – SCMP

The South China Morning Post (SCMP) shares China’s 2021-25 raw material development plan while spotting negative news for the AUD/USD traders during early Friday morning in Asia.

“China will encourage domestic exploration of iron ore and use more scrap metals to reduce reliance on imports from countries like Australia, while streamlining production quotas for rare earth and tungsten, according to the government,” said the news.

Key quotes

Iron self-sufficiency would be ‘significantly’ increased by lifting the supply of scrap steel to more than 30 percent of the total, encouraging domestic mining and reducing steelmaking capacity.

China imported more than 80 percent of iron ore requirements last year, about 60 percent of which was from Australia.

Despite deteriorating diplomatic ties, Beijing has not made an effort to restrict Australian iron ore imports.

Market implications

As iron ore becomes Australia’s biggest export earner, the news should have weighed on the AUD/USD prices, currently sidelined around 0.7250. However, a lack of major data/events joins the year-end liquidity crunch to restrict market moves.

Read: AUD/USD: Gravestone Doji at monthly top probe bulls below 0.7300, China PMI eyed