An employee works at an iron and steel factory in Changzhi, north China’s Shanxi province.  (Reuters Photo)

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 percent  higher at 686.5 yuan ($96.89) a metric ton.

The benchmark October iron ore on the Singapore Exchange was 1.52 percent  higher at $92.1 a ton.

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 percent 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 percent  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.