MANILA: Prices for steel products and steelmaking ingredients on China's commodity futures bourses surged on Thursday, following reports that China Evergrande Group had made coupon payments to bondholders, easing concerns about a potential default.

Traders' concerns over China's debt-laden property sector had recently weighed on prices of steel and iron ore, which were already under pressure due to weak domestic demand for the materials.

Several bondholders of Evergrande have received coupon payments from the indebted property developer, a source with knowledge of the matter said on Thursday.

The most-traded construction steel rebar for January delivery on the Shanghai Futures Exchange rose as much as 6.2% to 4,394 yuan ($687.46) a tonne, extending an overnight rally along with iron ore.

The most-active January iron ore on the Dalian Commodity Exchange advanced by up to 6.3% to 567.50 yuan a tonne, bouncing off Wednesday's one-year low. On the Singapore Exchange, iron ore's front-month December contract rose 2.8% to $90.30 a tonne.

"Prices rebounded later in (Wednesday's) session after Evergrande was said to have made payment on at least two bonds," said Daniel Hynes, senior commodity strategist at ANZ. Hot-rolled coil climbed 7.2%. Other steelmaking inputs also rebounded after recent sell-offs, with Dalian coking coal rising 6.7% and coke gaining 8%.

Bucking the trend, Shanghai stainless steel slipped 0.3%. Weak demand and rising portside stockpiles, however, continued to weigh on spot iron ore prices in China, the world's top steel producer, with the benchmark 62% grade hitting an 18-month low of $90 a tonne on Wednesday, SteelHome consultancy data showed.

"We expect iron ore prices to find a floor around current levels. But constraints on China's steel output are likely to remain until after the Beijing Winter Olympics (in February), so the upside looks limited in the short-term," Hynes said.

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