According to a report by Mysteel, certain Chinese steel mills have initiated production cuts due to an oversupply and low profitability affecting the industry. The consultancy mentioned that four steelmakers in Xinjiang have announced a 10% reduction in production starting from Monday. However, the impact on the overall market is minimal as the region only contributed 1.3% of steel output nationwide last year. Mysteel estimates that this cut will affect around 2,000 tons of daily steel output in a country where almost 3 million tons are produced each day. This decision aligns with the government's commitment to decrease output made during its annual legislative meetings earlier this month in an effort to combat the industry's excessive production. Mysteel stated that these production cuts are more of a psychological boost. The companies involved include Xinjiang Ba Yi Iron and Steel Co., a subsidiary of the top global producer, China Baowu Steel Group, along with Xinjiang Kunlun Steel Co., Xinjiang Minxin Iron Steel Group Co., and Xinjiang Kunyu Iron & Steel Co. Following the announcement, Ba Yi saw a 7.5% rise in its stock price in Shanghai on Monday, but these gains were reduced on Tuesday. The reduction in production has also led to a 0.9% drop in iron ore futures in Singapore, as a decrease in demand for the raw material used in steelmaking is anticipated.