Iron ore futures continued to rise as Chinese steelmakers' improvement in rebar margins supported the demand outlook.
Prices jumped 10 percent in the Singapore market, and with it, iron ore's rise from lows in September approached 50 percent.
Rebar margins in China increased at the end of September, according to a survey by research firm Mysteel based on 91 smelters in the country.
On the other hand, Mysteel noted that daily crude steel production is expected to increase by 0.6 percent to 2.6 million tons at the beginning of October compared to the end of September.
Steel production expected to increase in China
"Steel output is expected to increase in some parts of China, such as Tangshan, Jiangsu, Zhejiang and Anhui, in October after these regions passed steel production cuts in September," said Vivek Dhar, commodities analyst at the Commonwealth Bank of Australia. Affected plants may see production meet or exceed October levels in November.”
Fortescue Metals Group CEO Elizabeth Gaines said at the Financial Times Mining Summit last week that steel production restrictions in China may be relaxed as 2022 approaches to meet strong demand. Gaines added that the iron ore market has been very “strong” despite the recent decline in prices due to the slowdown in the real estate sector and steel production cuts.
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