BEIJING: Chinese iron ore futures on Wednesday extended gains for a fourth straight session on as robust demand prospects from the world’s top consumer and insufficient inventories at steel mills due to lean port arrivals boosted the steelmaking ingredient.

“Steel mill’s imported ores and sinter inventories fell 12.9% as of Nov. 4 from pre-October,” Tianfeng Futures wrote in a note, citing data compiled by Mysteel consultancy.

“Current molten iron output is way above same period year ago, mills need to largely restock if they are not cutting production before the Spring Festival holidays.”

Blast furnace’s capacity utilisation rates at 163 mills across China dipped to 83.88% last week from a week earlier, according to Mysteel data, but compared with 81.93% in November last year.

The most actively traded iron ore futures on the Dalian Commodity Exchange, for January delivery, ended up 1.0% at 838 yuan per tonne, its highest closing since Sept. 15.

Spot prices of iron ore with 62% iron content for delivery to China also increased for a fourth day and stood at $121.5 per tonne on Tuesday.

Other steelmaking ingredients were mixed, with the February coking coal contract rising 2.6% to 1,337 yuan per tonne, while the January coke contract slipped 0.9% to 2,420 yuan a tonne.

Steel rebar on the Shanghai Futures Exchange dipped 0.1% to 3,843 yuan a tonne.

Hot-rolled coils, used in the manufacturing sector, declined 0.4% to 3,948 yuan a tonne.

Stainless steel futures fell 1.4% to 13,675 yuan a tonne.

Vehicle sales in China rose 12.5% in October from the same month a year earlier, the seventh straight monthly rise as the world’s biggest vehicle market continued to lead the global auto industry recovery from lows hit during the COVID-19 pandemic.

Brazilian miner Vale SA will place caution before capacity as it seeks to avoid driving down the iron ore market and presses forward with its recovery from a deadly dam break in 2019.