Iron ore futures prices rallied on Monday as top consumer China’s pledge of more proactive fiscal policies in 2026 boosted sentiment and demand hopes for the key steel-making ingredient.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) TIO1! closed daytime trade 2.58% higher at 796.5 yuan ($113.66) a metric ton, after touching its highest level since December 3 at 803 yuan earlier in the session.

The benchmark January iron ore (SZZFF6) on the Singapore Exchange added 1.32% to $106.03 a ton, as of 0730 GMT. It hit the highest since November 27 at $106.55 earlier.

China’s finance ministry on Sunday said fiscal policies will be more proactive next year and that China would boost consumption and actively expand investment in new productive forces.

Iron ore prices also found support from “some steel mills having resumed production after completing annual furnaces maintenance,” Chinese broker Everbright Futures said, which dictated more need for feedstocks, including iron ore.

Supporting iron ore prices was “improved steel margins thanks to lower production costs,” consultancy Mysteel said in a note.

Also bolstering sentiment was the easing of concern in the property market, as China developer Vanke’s 000002 bondholders approved a proposal by the state-backed developer to extend the grace period for the repayment of a 3.7 billion yuan bond.

“Given relatively lower open interest and exchange-traded futures volumes, iron ore futures have been driven more by a short squeeze rather than any tangible or material changes in short-term supply-demand fundamentals,” said Atilla Widnell, Managing Director at Navigate Commodities.

Other steel-making ingredients on the DCE fell, with coking coal NYMEX:ACT1! and coke (DCJcv1) down 1.27% and 1.58%, respectively.

Steel benchmarks on the Shanghai Futures Exchange were mixed. Rebar RBF1! strengthened 0.71%, hot-rolled coil EHR1! rose 0.55%, while stainless steel HRC1! fell 0.35% and wire rod fell 3.55%.
Source: Reuters