Iron ore futures rose, mirroring upbeat sentiment in Chinese equities and base metals markets, and shrugging off Brazilian miner Vale SA’s higher output in the second quarter.
Iron ore on the Dalian Commodity Exchange jumped 2.6 percent to 839.50 yuan ($120.19) a ton in early trade, stretching overnight gains after three consecutive sessions of losses.
Iron ore on the Singapore Exchange advanced 2.4 percent to $108.60 a ton, after a four-day decline.
China stocks rose 3 percent on Monday and were headed for further gains after regulators moved to bolster the market by lifting equity investment cap for insurers and encouraging mergers and acquisitions among brokerages and mutual fund houses.
Iron ore continues to defy fundamentals, with the Dalian benchmark contract on track for its fifth month of gains in a row and spot prices hovering near one-year highs, prompting some analyst to warn of a sharp correction.
“A recovery in shipments from Vale and rising ore stocks in China’s ports point to an imminent correction,” analysts at Morgan Stanley wrote in a note dated July 19.
