Iron ore futures rose on Monday, with China's benchmark contract extending a run of strong gains for a third session, buoyed by a positive demand outlook for the steelmaking ingredient in the world's top steel producer.
However, trading in iron ore spot and futures is expected to be light this week as China heads for a week-long Lunar New Year holiday, beginning on Thursday.
The most-traded May iron ore contract on China's Dalian Commodity Exchange advanced as much as 3.4% to 1,033 yuan ($159.96) a tonne in morning trade, its strongest level since Jan. 28.
Iron ore's May contract on the Singapore Exchange climbed 2.7% to $147 a tonne, its highest level since Jan. 29.
China's appetite for iron ore remains strong despite seasonally-weak domestic demand for steel products, as imports likely rose sharply last month.
China's January iron ore imports reached 108 million tonnes, a gain of 18 million tonnes over December and 9 million tonnes from a year earlier, according to market intelligence firm Kpler.
"The trend of import strength is likely to continue into 2021, and whilst not all underlying data is positive for iron ore demand, China's manufacturing sector looks healthy," Kpler said in a note.
While China's factory activity grew at the slowest pace in five months in January, hit by a wave of domestic coronavirus infections, it remained in line with the ongoing recovery in the world's second-largest economy.
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