BEIJING: Prices of iron ore futures rebounded on Wednesday to the highest level in more than six weeks, aided by renewed hopes of improved steel demand in top consumer China and the prospect of lower supply after a major miner lowered its annual shipment outlook.

The most-traded September iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trade 3.08% higher at 888 yuan ($122.55) a metric ton, its highest since March 8. It fell more than 1.5% on Tuesday.

The benchmark May iron ore on the Singapore Exchange climbed 5.12% to $118.55 a ton, as of 0700 GMT, the highest since March 7. Iron ore fundamentals have improved and the valuation of the ferrous market is expected to rise, analysts at Galaxy Futures said in a note.

“The issuance of the special bonds is expected to speed up ahead, while the improvement in steel demand may sustain as construction steel consumption will continue to recover and the manufacturing sector-led steel demand will likely remain resilient.” Special bonds are typically used to fund infrastructure projects.

The state planner said on Tuesday it would guide local governments to accelerate the progress of project construction and fund use, with analysts at Zijintianfeng Futures anticipating hot metal output to pick up further in the coming weeks.