Iron ore futures soared on Monday, extending a rally spurred by hopes of an economic rebound for top steel producer and consumer China in the third quarter, and support for the country’s troubled property sector.

The most-traded iron ore, for September delivery, on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 7.1% higher at 711 yuan ($105.27) a tonne, after earlier hitting 723.50 yuan, its strongest level since July 14.

Iron ore’s front-month August contract on the Singapore Exchange SZZFQ2 was up 2.2% at $105.40 a tonne, as of 0702 GMT, after lodging its first weekly gain in three weeks on Friday.

Dalian coking coal DJMcv1 rose 3.3% and coke DCJcv1 advanced 2.9%.

China will make “great efforts” to consolidate its economic recovery particularly in the crucial third quarter, putting a priority on stabilising employment and prices, state media reported on Friday after a regular cabinet meeting.

“The market is looking forward to the economy (rebounding) in the third quarter,” analysts at Zhongzhou Futures said in a note.

China’s economic growth slowed sharply in the June quarter, hit hard by COVID-19 lockdowns that dampened overall demand and disrupted activity.

Chinese steel futures also extended their gains following reports that China was planning to set up a real estate fund that could be worth up to 300 billion yuan to support more than a dozen property developers.

Rebar on the Shanghai Futures Exchange SRBcv1 rose 0.8%, hot-rolled coil SHHCcv1 climbed 1.6%, and stainless steel SHSScv1 advanced 1.2%.

But with no meaningful changes in market fundamentals while risks remain from lockdowns, caution is likely to limit any gains.

Shanghai ordered residents across nine of the city’s districts and some smaller areas to do COVID-19 tests over July 26-28, as sporadic local cases kept emerging in the commercial hub.

Source: Reuters