Top-traded iron ore for January delivery on China's Dalian Commodity Exchange DCIOcv1 rose 3.3 percent to 837 yuan ($129.17) per tonne.
Iron ore's most active October contract on the Singapore Exchange SZZFV1 rose 3.3 percent to $150.60 per ton as of 0354 GMT.
The pullback in iron ore prices from record highs in May has helped increase steel margins, which may have prompted Chinese mills to increase their output.
Referring to a report by the China Iron & Steel Association, analysts said that daily crude steel production for the period of 11-20 August averaged 2.14 million tons, up 4.6 percent compared to the average volume in the first 10 days of the month.
Spot iron ore fell from a record high of over $230 in May to just under $150 per tonne as Chinese demand fell, in part due to the country's ongoing steel production controls.
However, optimism regarding China steel demand is providing some support for steel and iron ore prices.
"The acceleration in local government bonds is fueling hopes for stronger steel demand in the coming months," said Daniel Hynes, senior commodity strategist at ANZ, referring to more than 600 billion yuan worth of bonds sold by local authorities since last week.
Aug 26 (Reuters) - Iron ore prices rose more than 3% on Thursday and the Dalian gauge rose for the fourth consecutive session, bolstered by hopes of recovery in steel demand and improved steel profit margins in top consumer China.
Top-traded iron ore for January delivery on China's Dalian Commodity Exchange DCIOcv1 rose 3.3 percent to 837 yuan ($129.17) per tonne.
Iron ore's most active October contract on the Singapore Exchange SZZFV1 rose 3.3 percent to $150.60 per ton as of 0354 GMT.
The pullback in iron ore prices from record highs in May has helped increase steel margins, which may have prompted Chinese mills to increase their output.
Referring to a report by the China Iron & Steel Association, analysts said that daily crude steel production for the period of 11-20 August averaged 2.14 million tons, up 4.6 percent compared to the average volume in the first 10 days of the month.
Spot iron ore fell from a record high of over $230 in May to just under $150 per tonne as Chinese demand fell, in part due to the country's ongoing steel production controls.
However, optimism regarding Chinese steel demand is providing some support for steel and iron ore prices.
"The acceleration in local government bonds is fueling hopes for stronger steel demand in the coming months," said Daniel Hynes, senior commodity strategist at ANZ, referring to more than 600 billion yuan worth of bonds sold by local authorities since last week.
He said the proceeds from these bond sales are often used to finance infrastructure projects.
Nevertheless, the general mood in the ferrous metals markets remained cautious.
“The headwinds for the steel and iron ore market are still strong,” Hynes said.
Construction steel rebar SRBcv1 on the Shanghai Futures Exchange rose 0.2%, while hot rolled coil SHHCcv1 fell 0.6%. Stainless steel SHSScv1 gained 0.3%.
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