China's iron ore futures hit 2-week high

Iron ore futures rose on Wednesday, bolstered by expectations of a further pickup in steel output and demand in China against the backdrop of an improving outlook for global economic activity.

Benchmark iron ore on China's Dalian Commodity Exchange closed up 1.1% at 854.50 yuan ($125.21) a tonne, rising for a fifth straight session. Its settlement price of 850 yuan was the highest since August 20.

The steelmaking ingredient's benchmark price on the Singapore Exchange rose 1.3% to $121.10 a tonne in afternoon trade.

Iron ore prices in China, which accounts for more than half of the world's steel output, have soared past $100 a tonne since late-May, hitting multi-year peaks last month on strong domestic demand fuelled mainly by a stimulus-driven construction boom.

Spot prices hovered near 6-1/2-year highs, with the benchmark 62% material at $126 a tonne on Tuesday, SteelHome consultancy data showed.

"Prices above $120 look toppish to me, but it is difficult to be bearish in this climate," said Howie Lee, economist at OCBC Bank in Singapore. "Any technical correction is likely to be shallow and iron ore is likely to find strong support above $100."