MANILA: Benchmark Dalian and Singapore iron ore futures rose for a third straight session on Monday, buoyed by renewed optimism around demand for the steel-making ingredient as signs emerged that top steel producer China is back to ramping up output this month.

Iron ore’s most-active January contract on the Singapore Exchange rose as much as 6.7% to $127.95 a tonne, its highest since Oct. 12.

The most-traded iron ore for May delivery on China’s Dalian Commodity Exchange ended the morning session 0.7% higher at 687.50 yuan ($107.80) a tonne.

The futures rally mirrored the upbeat mood in the physical market, with the benchmark 62%-grade iron ore trading at $120 a tonne on Friday, its highest since Oct. 27, based on SteelHome consultancy data.

“Analysts expect a rebound in steel output as Beijing’s yearly targets have been met, prompting mills to resume production,” resources sector advisor and broker SP Angel said in Dec. 17 note.

With China churning out 946.36 million tonne crude steel during January-November, down 2.6% from the year-ago period, there is scope for mills to ramp up production as the target is to limit this year’s output to no more than last year’s volume of 1.05 billion tonnes in order to control emissions.