China’s Industrial Profits Decline Eases as Steel Cuts, Coal Caps Boost Iron Ore, Copper Prices and Loan Subsidies

China's industrial profits have continued to decline amid weak demand and deflationary pressures, though the rate of decline has eased for the second consecutive month following government policy support. The Chinese government is actively addressing overcapacity issues in key sectors, including steel and coal production. Authorities are promoting steel production cuts to tackle excess capacity, which has contributed to rising iron ore prices. Steelmakers in China have experienced some improvement as export demand remains resilient despite trade restrictions. Additionally, coal production is being capped to support prices, according to top miners and analysts. The broader industrial metals market has responded positively, with London Metal Exchange copper prices rising due to stronger Chinese industrial profits, despite the strength of the US dollar. The government has also subsidized consumer loans to counter deflation risks and stimulate demand.