BEIJING: Iron ore extended its climb on Monday, with the most active Dalian futures nearing the key level of 900 yuan ($123.00) a metric ton, boosted by solid demand and optimism following top consumer China’s decision to roll out fiscal stimulus.

The most-traded January iron ore on China’s Dalian Commodity Exchange (DCE) was up 2.11% at 896.5 yuan a ton, as of 0202 GMT, the highest since April 4.

The benchmark November iron ore on the Singapore Exchange climbed 0.15% to $119.85 a ton, but lingering fears of higher-for-longer US interest rates limited gains.

China’s top parliament body has approved a 1 trillion yuan sovereign bond issue and passed a bill to allow local governments to frontload part of their 2024 bond quotas, as the latest efforts to stimulate its economy.

Baoshan Iron and Steel, China’s largest-listed steelmaker, said it expects steel demand in the country to find strong support from both traditional and new infrastructure sectors in the last quarter of this year and in 2024.

Lending support is also “the remaining strong demand for iron ore as fewer-than-expected mills have cut output despite continuously shrinking margins,” analysts at Sinosteel Futures said in a note. “If there is not an obvious reduction in steel output later, it’s hard to see a big fall in spot (iron ore) prices, resulting in mounting basis risks,” they added.