MANILA: Dalian iron ore futures edged higher on Thursday while the Singapore benchmark price steadied near a six-month peak, underpinned by continued optimism about demand prospects in China, the world’s top steel producer.

Prospects of stronger demand in China, which has dismantled COVID-19 restrictions and rolled out supportive policies particularly for its ailing property sector, have supported a rally in the ferrous complex since early November.

Iron ore’s most-traded May contract on China’s Dalian Commodity Exchange ended morning trade 1% higher at 852 yuan ($126.08) a tonne.

“Considering that the government’s full support for real estate and the post-epidemic economic recovery will stimulate consumption of iron ore, it is still recommended to call back more iron ore,” Huatai Futures analysts said in a note.

With global recessionary risks increasing, China has pledged measures that will help boost domestic demand and ensure steady and orderly financing to the property sector.

On the Singapore Exchange, however, the steelmaking ingredient’s benchmark February contract was down 0.1% at $121.90 a tonne by the midday break.

Chinese steel benchmarks also retreated, hit by caution ahead of Lunar New Year holidays later this month and winter slowdown in construction activity that are expected to curb near-term production and demand.

Rebar on the Shanghai Futures Exchange slipped 0.4%, hot-rolled coil dipped 0.3%, and wire rod shed 0.2%. Stainless steel dropped 0.8%. Dalian coking coal fell 1.1%, while coke rose 0.7%.

“In the near term, (China’s) reopening will release some pent-up demand, leading to a strong rebound in H1,” ANZ economists said in a note. However, they believed the easing measures “will not be able to address structural impediments faced by the economy.”