BEIJING: Chinese iron ore futures jumped nearly 5% on Wednesday, after falling for three straight sessions, as hopes of demand recovery at mills rose, even as COVID-19-led lockdowns in the country disrupted economic activity. The most-active iron ore futures on the Dalian Commodity Exchange, for September delivery, jumped 4.8% to 817 yuan per tonne as of 0330GMT. On the Singapore exchange, the most-traded June iron ore contract gained 3.4% to $130.75 per tonne.

“The (pandemic’s) impact on areas such as Tangshan is easing, and raw materials’ transportation has resumed,” analysts with Haitong Futures said in a note, adding that daily molten iron output recovered from previous weeks. However, profits at mills are relatively low and steel production controls may still weigh on mills’ utilisation rates, said the note. China’s producer price index rose 8% year-on-year in April, the slowest pace in a year, data from the National Bureau of Statistics showed, giving policymakers headroom for more stimulus to shore up a flagging economy.

Coking coal prices on the Dalian bourse rose 2.5% to 2,678 yuan a tonne and coke futures increased 2.4% to 3,422 yuan per tonne. The jump in raw material prices also drove steel products on the Shanghai Futures Exchange. Construction material steel rebar for October delivery advanced 2.2% to 4,689 yuan ($698.14) a tonne.

Hot rolled coils, used in the manufacturing sector, leaped 2.3% to 4,793 yuan per tonne. China’s top listed steel producer Baoshan Iron & Steel said on Tuesday it would cut June delivery prices for hot rolled and cold rolled products by 100 yuan per tonne. Shanghai stainless steel gained 1.5% to 18,975 yuan a tonne.