Iron ore extended its rally on Tuesday, with the Singapore benchmark hitting its highest in more than three weeks underpinned by policy measures to shore up China’s sputtering economic rebound and signs of rising Chinese demand.

The steelmaking ingredient’s most-active September contract on the Singapore Exchange SZZFU3 climbed as much as 3.4% to $111.05 per metric ton, its strongest level since July 27.

The most-traded January iron ore on China’s Dalian Commodity Exchange DCIOcv1 ended daytime trade 4.5% higher at 805.50 yuan ($110.52) per ton, extending its rally to a ninth straight session.

“The implementation of macro and micro-targeted fiscal and monetary easing policy measures on a municipal and provincial level appears to be back in vogue and picking up momentum,” said Navigate Commodities Managing Director Atilla Widnell.

Widnell cited a report saying China had permitted 12 provinces and regions to issue 1.5 trillion yuan of special financing bonds, which he said may help improve funding for construction and infrastructure projects.

The interest rate cuts by the People’s Bank of China, along with a slowly recovering steel demand, have also spurred “temporary upside shocks”, he said.

“High-level hot metal output and low iron ore inventory at ports support resilient raw material prices in the near term,” industry data and consultancy provider Mysteel said.

Coking coal DJMcv1 and coke DCJcv1 on the Dalian exchange jumped 5.3% and 5%, respectively.

“The Chinese market players expect sound domestic (steel) demand in September, which is the traditional peak demand season,” Mysteel said in its weekly outlook.

Imported iron ore stocked at Chinese ports stood at 116.5 million tons, as of Aug. 11, the lowest level since late-August 2020, SteelHome consultancy data SH-TOT-IRONINV showed.

Rebar on the Shanghai Futures Exchange SRBcv1 added 1.6%,hot-rolled coil SHHCcv1 gained 1%,wire rod SWRcv1 climbed 1.2%,and stainless steel SHSScv1 rose 1%.
Source: Reuters (Reporting by Enrico Dela Cruz in Manila; Editing by Varun H K and Sonia Cheema)