MANILA: Iron ore prices rose on Thursday, propped up by continued speculation that top steel producer China would ease its strict COVID-19 rules along with hopes that Chinese stimulus measures would offset the impact of a global economic slump on demand.

The steelmaking ingredient has rebounded after a rout in October, with gains largely driven by rumours that China would pivot away from its strict zero-COVID policy by next year. Officials have denied knowledge of such a rumoured plan.

It made further gains on Wednesday when Chinese regulators assured investors that economic development remained a priority, and that the central bank would be able to maintain positive interest rates for as long as possible.

The most-traded January iron ore on China’s Dalian Commodity Exchange ended morning trade 1.4% higher at 636.50 yuan ($87.17) a tonne, on track for its third straight day of gains. On the Singapore Exchange, benchmark December iron ore was up 0.7% at $81.10 a tonne. Miner BHP Group Ltd expects China to be a source of stability for commodity demand over the next 12 months, as its stimulus measures progressively take effect while the global economic outlook remains “very uncertain and fragile”.

Other analysts, however, provide a contrasting view of steel demand in China. “As steel mills’ profits continued to shrink, blast furnace production reduction and maintenance plans increased this week,” Huatai Futures analysts said in a note.

Rebar and hot-rolled coil on the Shanghai Futures Exchange rose 0.8, wire rod gained 0.4%, while stainless steel dipped 0.8%. Other Dalian steelmaking inputs also advanced, with coking coal and coke up 2.1% and 1.9%, respectively.