MANILA: Iron ore futures rose on Tuesday, with the Singapore benchmark price hitting its highest in nearly five months after top steel producer China decided to scrap quarantine rules for inbound visitors, boosting investor sentiment.

China will stop requiring inbound travellers to go into quarantine starting from Jan. 8, a major step towards easing its strict COVID-19 containment policy that has curbed industrial activity and domestic demand, and ignited public unrest last month.

The most-traded May iron ore on China’s Dalian Commodity Exchange climbed as much as 2.1% to 838 yuan ($120.45) a tonne, its highest since Dec 16. It ended morning trade up 1.5% at 833 yuan.

On the Singapore Exchange, the steelmaking ingredient’s benchmark January contract rose by as much as 2.7% to $113.50 a tonne, the loftiest since early August.

“(China’s Covid) policy adjustments strengthen expectations for an economic recovery, and that may push prices higher,” Sinosteel Futures analysts said in a note.

The upbeat mood also boosted steel benchmarks and prices of other steelmaking ingredients. Rebar on the Shanghai Futures Exchange was up 2%, while hot-rolled coil rose 1.6%, wire rod climbed 1.3%, and stainless steel advanced 1.8%.

Near-term rebar and wire rod prices were likely to be range-bound this week as demand from Chinese end-users will weaken further amid the surge in infections and with the colder weather halting construction activities, according to Mysteel consultancy.

Dalian coking coal climbed 3.4% and coke gained 3.5%. Near-term coking coal prices were also supported by limited supply and some replenishment demand of Chinese coke producers ahead of the New Year and Spring Festival holidays.

“Coal mines (in China) have stopped production (due to rising COVID case numbers) and the supply side has continued to tighten,” Huatai Futures analysts said in a note.