BEIJING: Chinese iron ore and steel futures rose on Wednesday after falling for two consecutive days, as concerns stoked by the COVID-19 outbreak eased.

Benchmark iron ore futures on the Dalian Commodity Exchange had plunged more than 8% this week until Tuesday, while construction-used rebar on the Shanghai Futures Exchange lost some 3% on fears over sluggish demand outlook due to recurring COVID outbreaks in China.

“The panic sentiment had been released and the ferrous sector is returning to fundamentals,” Galaxy Futures wrote in a note, adding that spot market transactions for iron ore were recovering and there’s was still restocking downstream demand.

The most-active iron ore contract for September delivery jumped as much as 3.5% to 834 yuan ($127.19) a tonne in the morning session. They ended up 2.6% at 827 yuan.

Spot prices of iron ore with 62% iron content for delivery to China rose 50 cents to $139.5 a tonne on Tuesday, according to SteelHome consultancy. Steel prices also regained footing after Chinese President Xi Jinping vowed to step up infrastructure construction to boost domestic demand and drive economic growth.

Steel rebar for October delivery gained 1% to 4,864 yuan per tonne. Hot-rolled coils, used in the manufacturing sector, advanced 0.8% to 4,948 yuan a tonne. Shanghai stainless steel futures for June delivery dipped 0.2% to 816 yuan per tonne.