BEIJING: Iron ore futures rebounded on Tuesday with the Singapore benchmark at the highest level since February, as hopes resurfaced for more stimulus from policymakers in top consumer China to spur its economic recovery.

The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trading 1.52% higher at 969.5 yuan ($135.12) a metric ton, following a fall of 0.37% a day before.

The benchmark January iron ore on the Singapore Exchange was up 0.63% at $135.85 a ton, as of 0758 GMT, surrendering some earlier gains after hitting an intraday high at $136.35 a ton, the highest since February.

China’s leaders started a closed-door meeting on Monday to discuss economic targets and map out stimulus plans for 2024, Reuters reported, citing four sources familiar with the matter.

This came after China’s consumer price index (CPI) in November dropped 0.5%, both from a year earlier and compared with October, official data showed. This is a deeper fall compared to a Reuters poll of 0.1% declines both year-on-year and month-on-month. Supporting the prices of the key steelmaking ingredient is also the expectation of a wave of winter stocking among mills with low raw material inventories.

“Ore consumption will maintain at a relatively high level, in part due to the lingering expectation of winter stocking for raw materials,” analysts at Huatai Futures said in a note. Other steelmaking ingredients also strengthened on improved sentiment, with coking coal and coke on the DCE up 2.54% and 2.17%, respectively. Higher raw materials drove steel benchmarks on the Shanghai Futures Exchange broadly up.

Rebar added 0.55%, hot-rolled coil rose 0.41%, and stainless steel advanced 0.71%. “Some mills started maintenance on their blast furnaces due to thin margins, causing a contraction in supply,” analysts at Yongan Futures said in a note.

“Since the falling pace of steel output has exceeded that in demand, a further destocking is seen. But higher steel prices will constrain demand.” Wire rod fell 0.37%.