MANILA: Dalian iron ore climbed about 6% on Monday and the Singapore Exchange benchmark rebounded above $150 a tonne, as traders cheered China’s move to boost its short-term fund injection to counter any possible market liquidity tightness.

Other steelmaking ingredients trading on the Dalian Commodity Exchange and steel prices on the Shanghai Futures Exchange also rose, despite the risk-off sentiment in other assets amid China’s heightened COVID-19 curbs.

The most-traded Dalian iron ore, for September delivery, rose as much as 5.9% to 882.50 yuan ($138.46) a tonne, its highest since Aug. 30. Iron ore’s most-active May contract on the Singapore Exchange gained 1.7% to $156.85 a tonne.

“The market initially sold off in the first 15 minutes but has since reacted very positively to the People’s Bank of China injecting 150 billion renminbi in seven-day reverse repos this morning – shoring up short-term liquidity before the end of the current quarter,” said Atilla Widnell, managing director at Navigate Commodities in Singapore. “More aggressive liquidity injections provide the market some degree of comfort and confidence that local banks will not face a funding squeeze,” he said.

China will also soon roll out measures to make it easier for private companies to issue bonds, China’s securities regulator said late on Sunday. Heightened coronavirus restrictions in top steel producer China, with the financial hub of Shanghai launching a two-stage lockdown of the city of 26 million people, could further dampen growth outlook for the world’s second-biggest economy.

A 15% pullback in Shanghai nickel after the stainless steel raw material posted on Friday a record weekly gain, also prompted profit-taking in Shanghai stainless steel futures. The benchmark contract tumbled 6.3%. Construction steel rebar on the Shanghai exchange gained 1.8%, while hot-rolled coil advanced 1.5%. Dalian coking coal climbed 1.4% and Dalian coke added 1.1%.