The price of iron ore rose on Thursday after China's central bank said it would take monetary policy steps to help businesses affected by the covid-19 outbreak and support the recovery in consumption.
Returning from the five-day Labor Day holiday, traders were also optimistic that uplift demand for the steelmaking component at the world's largest steelmaker remained strong.
Comparison of 62% Fe fines imported into northern China rose 0.79% to $150.75 per tonne.
The top-traded iron ore contract on China's Dalian Commodity Exchange in September ended day trading at 871.50 yuan ($131.74) per tonne, up 1.9 percent. It touched 881.50 yuan at the start of the session, reaching the highest level since April 25.
The People's Bank of China pledged on Wednesday that it "will not waste time planning incremental policy tools to support stable economic growth, stabilize employment and prices, to ensure a fair monetary and financial environment."
The elaborate comments came after a top decision-making body in the ruling Communist Party promised to support the economy last week.
"While it may be left to the relevant government bodies to uncover the finer details, markets will look forward to looking forward to robust policies that will have a significant impact on iron ore and steel demand," said Atilla Widnell, managing director of Navigate Commodities.
Analysts said additional stimulus measures are becoming more urgent amid China's tough covid-19 restrictions.
Beijing closed several subway stations and bus routes on Wednesday and widened sidewalks in many public venues, while Shanghai remained under strict quarantine.
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