BEIJING: China’s benchmark iron ore futures surged nearly 10% in early trade on Tuesday to hit their daily upper limit, as steelmakers are set to resume production after rigorous controls in the past few months following government orders.

“The supply-side of iron ore has not changed much recently, but more mills are planning to increase output next month,” a Beijing-based trader said.

Another Shandong-based iron ore trader said the market is trading on expectation of rising steel production in December.

China had successfully controlled its January-October crude steel production at lower levels than the same period in 2020 after a raft of strict curbs and sluggish downstream demand, leaving room for steel firms to raise output for the rest of the year on a monthly basis.

The most actively traded iron ore futures on the Dalian Commodity Exchange, for January delivery, soared as much as 9.9% in the morning session, the biggest percentage gain since Sept.30. They surged 9.1% to 594 yuan ($93.02) a tonne as of 0306 GMT. Spot prices of iron ore with 62% iron content for delivery to China rose $4 to $95.5 a tonne on Monday, according to SteelHome consultancy. Other steelmaking ingredients also increased. Dalian coking coal futures jumped 3.1% to 1,925 yuan a tonne and coke prices were up 1.4% to 2,894 yuan per tonne. Construction steel rebar on the Shanghai Futures Exchange leaped 1.6% to 4,390 yuan a tonne, extending gains into the third straight session. Hot rolled coils, used in the manufacturing sector, inched 0.5% higher to 4,470 yuan per tonne. Shanghai stainless steel futures rose 1.2% to 17,525 yuan a tonne.