MANILA: Iron ore futures extended their rally to a fifth session on Thursday, pushing the Singapore benchmark to a four-week high, bolstered by rebounding steel margins in China that have prompted some steel producers to restart blast furnaces. The most-traded iron ore, for September delivery, on China’s Dalian Commodity Exchange climbed 5.1% to 778 yuan ($115.28) a tonne, its strongest level since July 8.

September iron ore on the Singapore Exchange rose 4.7% to $117.70 a tonne, the highest since June 30. Twelve blast furnaces in China have resumed operations as margins improved, according to Chinese metals information provider SMM, although dozens remained shut. Chinese steel mills had reduced their output in recent weeks, putting some of their facilities under maintenance earlier than usual, as weak demand and low prices - attributed to COVID-19 lockdowns and bad weather - squeezed margins.

Iron ore and other steelmaking ingredients have now been supported by what analysts at Zhongzhou Futures said a “sharp recovery” of steel margins. Sentiment has also been buoyed by signs of an economic rebound in China, the world’s top steel producer and consumer, with industrial output and profits recovering in June. Construction steel rebar on the Shanghai Futures Exchange rose 3.2%, while hot-rolled coil advanced 2.8%. Stainless steel gained 0.7%.

Dalian coking coal climbed 5.6% and coke rose 4.6%. Analysts, however, warned of continued market volatility as COVID-19 curbs and China’s ailing property sector remain key concerns.

“Iron ore is still under pressure in the medium term,” Zhongzhou analysts said in a note. A district in China’s financial hub of Shanghai has ordered a three-day lockdown of some of its steel warehouses from July 26 after a residential neighbourhood in the district was classified as high risk following the detection of a coronavirus case there.