MANILA: Iron ore futures climbed on Thursday, with the Dalian benchmark hitting a fresh seven-week high while prices in Singapore rose for a seventh straight session, as China’s big banks cut deposit rates in a move seen as supportive of economic growth.

China’s state-backed banks lowered the rates on yuan deposits, in actions that could ease pressure on profit margins and reduce lending costs, providing some relief for the financial sector and wider economy.

Analysts say the move opens the door for further monetary stimulus, including a cut in the reserve requirement ratio to support local government bond issuance.

The most-traded September iron ore on China’s Dalian Commodity Exchange rose as much as 3% to 793.50 yuan ($111.16) per metric ton, its strongest since April 18.

On the Singapore Exchange, the steelmaking ingredient’s benchmark July contract climbed by up to 1.9% to $109.90 per metric ton, its highest since April 21.

Iron ore has been mainly lifted by speculations since late May about China rolling out additional stimulus to reinvigorate its struggling property sector and wider economy, defying analyst warnings that gains might not be sustained without effective and broad measures.

“The short-term market is affected more by macro expectations,” Sinosteel Futures analysts said, while pointing out that fundamentals have not really changed much.

Steel demand in China is expected to weaken during the summertime lull in construction activity in China beginning this month. “Iron ore prices are expected to fluctuate in the coming week when there are some positive market sentiments along with uncertainty regarding the implementation of policies,” industry consultancy and data provider Mysteel said in its weekly outlook.