Iron ore on the Dalian Commodity Exchange closed 2.8% higher at 841 yuan ($120.32) a tonne, after falling for three straight days.
On the Singapore Exchange it advanced 2.4% to $108.60 a tonne in afternoon trade, rebounding from a four-day decline.
China stocks rose 3% on Monday and were headed for further gains after regulators moved to bolster the market by lifting equity investment cap for insurers and encouraging mergers and acquisitions among brokerages and mutual fund houses.
The steelmaking ingredient continues to defy fundamentals, with the Dalian benchmark contract on track for its fifth straight month of gains, and spot prices hovering near one-year highs, prompting analysts to warn of a sharp correction.
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