The half percentage point cut in China's bank reserve requirement ratio, seen as a policy shift to ease credit access and shore up the world's second-largest economy, should help iron ore prices recover this month after falling to three-week lows on Tuesday. The most-traded May rebar contract on the Shanghai Futures Exchange climbed 2.6 percent to 4,179 yuan a tonne by the midday break, its steepest gain since Nov. 4. Rebar hit a session high of 4,247 yuan, a level not seen since Oct. 17. "The RRR (reserve requirement ratio) cut means more liquidity and can cheer up the market, so we can't rule out the possibility that iron ore prices could rise in December," said an official who buys iron ore for a small-sized steel mill in northern China. But the official said the continued weakness in steel demand may limit buying interest in key raw material iron ore. "As far as I know, some major traders are reluctant to sell their material at loss-making prices and preferred to stay put with plenty of stocks," he said. "We are still trying to maintain inventories as low as possible." Iron ore with 62 percent iron content was largely steady on Wednesday, up 10 cents to $130.90 a tonne, according to the Steel Index. Iron ore fell to a three-week low of $130.80 on Tuesday as slower steel demand in top consumer China kept the mills mostly out off the spot market. In a sign iron ore prices may be on the road to recovery, sellers of imported ore in China raised offer prices on Thursday after slashing them for the most part of the past two weeks. Offers for Australian pilbar iron ore fines rose a dollar to $132-134 a tonne, cost and freight, and Newman fines also increased by a dollar to $136-$138, said Chinese consultancy Umetal. Indian 63.5/63 grade fines were also up a dollar to $143-$145 a tonne, said Umetal. Also supporting sentiment was the concerted action by the world's major central banks, including the Federal Reserve and the European Central Bank, to provide cheaper dollar funding to European banks facing a credit crunch. That helped lift rebar and other Shanghai-traded commodities, with copper and zinc surging by their 6 percent daily limit. Prices of iron ore forward swaps rose on Wednesday, suggesting investors are looking to firmer spot rates. But other traders say the bank reserve requirement ratio cut by China's central bank may have a limited impact on the country's steel market. "This doesn't suggest any change in Beijing's monetary policy direction but just fine-tuning," said Zhang Chunzi, a broker with SDIC CGOC Futures in Beijing.