MANILA: Dalian and Singapore iron ore futures were range-bound on Thursday as traders remained cautious due to weak profits at Chinese steel mills following a recent surge in prices of the steelmaking ingredient.

The benchmark September iron ore contract on China’s Dalian Commodity Exchange ended the morning session 0.2% higher at 929 yuan ($139.14) a tonne, after moving in a narrow range.

Iron ore’s most-active July contract on the Singapore Exchange was virtually flat at $144.75 a tonne by 0527 GMT.

Dalian iron ore has rebounded 19% from this year’s low of 779.50 yuan a tonne hit on May 10, while the spot price for the benchmark 62%-grade material in China jumped to $147.50 a tonne on Wednesday, the highest in nearly seven weeks, based on SteelHome consultancy data. “The short-term iron ore demand has increased more than expected, but the profits of downstream steel mills are weak,” Sinosteel Futures analysts said in a note.

Iron ore’s prices appear to have limited upside potential, they said, with top steel producer’s China’s resolve to further reduce output this year to curb emissions also tempering optimism about demand. Sentiment also remained largely guarded after parts of Shanghai began imposing new COVID-19 lockdown restrictions on Thursday.

Offering some relief, data on Thursday showed China’s exports grew at a double-digit pace in May, shattering expectations in an encouraging sign for the world’s second biggest economy that has been hit hard by COVID-19 curbs. Construction steel rebar on the Shanghai Futures Exchange rose 0.3%, while hot-rolled coil gained 0.2%. Stainless steel slipped 0.4%. Dalian coking coal fell 0.7% and coke shed 0.5%.