AUD/USD faces pressure as China's steel output set to drop 4% in 2025

AUD/USD is experiencing downward pressure as China announces expectations for a 4% decline in steel production for 2025, extending the contraction trend that began in 2021. The reduction reflects Beijing's strategic shift away from infrastructure-heavy development and commitment to carbon emission reduction policies. As China represents Australia's largest trading partner and steel production is a key driver of iron ore demand, this development weighs heavily on the Australian dollar. Chinese steel output has been under government-imposed growth caps since 2021 as part of environmental initiatives. The commodity-linked AUD typically correlates strongly with Chinese industrial activity and raw material demand. Technical indicators suggest AUD/USD may test support levels near 0.6450 if bearish momentum continues. Traders should monitor additional Chinese economic data and any policy adjustments from the Reserve Bank of Australia that might offset commodity-related weakness.