Singapore Exchange benchmark April iron ore rose 2.91% to $106.9 a tonne at 0743 GMT, also the highest since March 13.
“Increased fixed asset investment will support steel demand,” ANZ analysts said in a note.
Official data on Monday showed fixed asset investment rose 4.2% in January-February from a year earlier, contrary to expectations of a 3.2% rise.
Analysts also said there were signs that futures prices were stabilizing a day earlier, prompting some factories to re-enter the market to source port cargo and increasing liquidity in the spot market. This is said to have boosted sentiment.
Iron ore trading volumes at China’s major ports rose 66% from the previous session to 1.06 million tonnes, according to data from consulting firm Miss Steel.
“We expect hot metal production to bottom out this week,” Galaxy Futures analysts said in a note.
“We don’t think we should be too bearish about the construction steel market, as steel demand from the infrastructure sector is expected to pick up clearly in late March or early April,” he added.
DCE’s other steelmaking raw materials also recorded increases, with coking coal and coke increasing by 3.59% and 2.49%, respectively.
The steel index on the Shanghai Futures Exchange rose. Prices of reinforcing bars increased by 2.85%, hot-rolled coils by 2.99%, wire rods by 2.14%, but stainless steel prices remained almost unchanged.
(1 dollar = 7.1993 Chinese Yuan)
(Writing by Zsastee Ia Villanueva and Amy Lv; Editing by Mrigank Dhaniwala and Sohini Goswami)
