SINGAPORE: Iron ore futures rebounded on Tuesday, supported by hopes of demand recovery in top consumer China and a potential export tax on Indian low-grade iron ore, although lower steel production in the near-term capped gains.

The most-traded May iron ore on China’s Dalian Commodity Exchange (DCE) ended daytime trade 1.24% higher at 897.5 yuan ($124.70) per metric ton.

The benchmark March iron ore on the Singapore Exchange was 1.75% higher at $117.45 a ton. India is considering an export tax on low-grade iron ore after small steel producers urged the government to curb its overseas sales, Reuters exclusively reported on Monday, citing two sources directly involved in the matter.

China typically accounts for more than 90% of overall shipments of iron ore from India, which is the world’s fourth-largest producer of the steel-making ingredient.

Boosting sentiment is also a rising stock market in the world’s second-largest economy. “The market is looking for a direction from the macroeconomic expectation, and in the face of a weak reality for the moment, it’s worth tracking how steel demand recovers,” analysts at Everbright said in a note.