SINGAPORE: Prices of iron ore futures recovered on Thursday, buoyed by lower stockpiles and higher steel export volumes from China, although the top consumer’s faltering domestic demand capped gains.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended morning trade 0.73% higher at 686.5 yuan ($96.89) a metric ton. The benchmark October iron ore on the Singapore Exchange was 1.52% higher at $92.1 a ton, as of 0330 GMT.

Iron ore buying in port stocks and seaborne cargoes markets warmed up on Sept. 18, as trading resumed after China’s Mid-Autumn Festival holiday, although prices declined, Chinese consultancy Mysteel said in a note.

Meanwhile, prices of steel products, in particular rebar and wire rod, are likely to strengthen over Sept. 18-20, supported by ongoing declines in steel inventories and rising production, Mysteel said.

Total iron ore stockpiles across ports in China dipped 0.73%week-on-week to 149.4 million tons, as of Sept. 13, Steelhome data showed. Latest trade numbers from Chinese customs show cumulative steel product exports were up 20% year-on-year, reaching 70.58 million tons over the first eight months of the year, ING analysts said.

The larger volumes of steel exports come amid weaker domestic demand, added ING. Last week’s rebound in iron ore prices was mainly caused by the mismatch between supply and demand of finished products, and downstream demand for replenishment ahead of the national holiday, said Chinese financial information site Hexun Futures. In the medium term, there is no significant change in iron ore fundamentals, as the pattern of high supply and weak demand remains, Hexun Futures said.

Other steelmaking ingredients on the DCE gained ground, with coking coal and coke up 1.58% and 0.97%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were stronger. Wire rod climbed 2.46%, rebar strengthened almost 0.8%, hot-rolled coil added 0.75% and stainless steel gained 0.6%.