MANILA: Dalian and Singapore iron ore futures rose on Friday, and stayed on track for second straight quarterly gains on expectations of improved steel demand in China in the second quarter, with tight supply concerns adding support.

The steelmaking ingredient has rebounded from October lows, as the lifting of the zero-COVID policy and supportive measures for the struggling property sector in China brightened economic recovery and steel demand prospects for the world’s biggest iron ore consumer. Expectations of improved Chinese demand particularly for construction steel during the spring season and declining iron ore portside inventory also boosted prices.

But global economic uncertainties and production restrictions at home, along with Chinese regulators’ warnings against excessive price speculation, curbed gains.

The most-traded May iron ore on China’s Dalian Commodity Exchange ended morning trade 1.3% higher at 908 yuan ($132.46) a tonne, with a quarterly gain of more than 6%. On the Singapore Exchange, benchmark May iron ore edged up 0.1% to $125.50 a tonne, and stretching its quarterly gain to more than 10%.

“Iron ore prices continue to be up on signs of tighter supply ahead of rising seasonal demand into China’s peak construction period,” National Australia Bank analysts said in a note. But the strength in Chinese iron ore demand may wane in the second half of the year, with China aiming to again reduce crude steel output this year in line with its carbon emission reduction goal, analysts said. China’s economic rebound also seems to be fragile.

“China’s recovery is underway but appears uneven, with infrastructure and manufacturing outperforming property and consumption,” Citi analysts said in a note. Rebar on the Shanghai Futures Exchange rose 0.7%, hot-rolled coil gained 0.9%, and wire rod added 0.1%, while stainless steel dipped 0.8%. On the Dalian exchange, coking coal rose 1.5% and coke advanced 2.4%.