Dalian iron ore futures leapt as much as 7% on Thursday on expectations of a rebound in demand as top steel producer China returned from a week-long Lunar New Year holiday, with signs of an accelerating global economic recovery adding to the optimism.
Most-traded May iron ore on China's Dalian Commodity Exchange ended the morning session 5.5% higher at 1,115.50 yuan ($172.93) a tonne, after earlier advancing to 1,131 yuan, its strongest level since Dec. 22.
The steelmaking raw material's March contract on the Singapore Exchange gained 0.4% to $167.50 a tonne.
Chinese steel mills are expected to ramp up production to rebuild stocks as many construction sites remained open throughout the holiday, and to meet future demand that is likely to be boosted by infrastructure-led stimulus and exports.
"Sentiment has also been supported by positive outlooks from the major exporters," said ANZ senior commodity strategist Daniel Hynes.
The global iron ore market is likely to remain robust for some time, given supply concerns and China's stronger-than-usual demand, Fortescue Metals Group Chief Executive Elizabeth Gaines said.
On Tuesday, BHP Group said it expects a continuation of strong Chinese demand in 2021, and a recovery in the rest of the world's global crude steel production.
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