Iron ore futures rose on Tuesday, as China’s pledge to provide more support for its flagging economy lifted sentiment, while expectations of a possible steel output cap at the top consumer strengthened steel prices.

The most-traded September iron ore on China’s Dalian Commodity Exchange ended midday trade 1.4% higher at 856.5 yuan ($119.87) per metric ton. The contract earlier hit 859.5 yuan, its highest since July 2021.

On the Singapore Exchange, the benchmark August iron ore was up 1.9%at $114.8a metric ton, as of 0715 GMT, after declining for two straight sessions.

China’s top leaders pledged on Monday to step up policy support for the economy amid a tortuous post-COVID recovery, focusing on boosting domestic demand, signalling more stimulus steps.

Earlier, China’s state planner unveiled measures to supportprivate investment and transform underdeveloped areas in megacities.

China stocks jumped at the open on Tuesday, with property developers rallying after a sharp sell-off in the previous session, as top policymakers said they would step up support for the embattled sector.

Steel prices also found some support from market talks that some mills in eastern and northern China have received verbal notice to keep steel output no higher than 2022 levels.

China’s state planner, the National Development and Reform Commission, did not immediately respond to a faxed request for comments.

Steel benchmarks on the Shanghai Futures Exchange jumped. The most-active rebar contract SRBcv1 strengthened 1.2%,hot-rolled coil spiked 2.2%, wire rod gained 0.6%, and stainless steel climbed 0.3%.

Steelmaking ingredients Dalian coking coal and coke rose 0.1% and 1.1%, respectively.

Rio Tinto is the first of the global iron ore majors expected to report lower half-year earnings from this week, as supply chains normalise after COVID-19 and attention turns to how suppliers to China’s steelmaking industry see customer demand.

Source: Reuters