China's iron ore futures bounced back on Thursday, hitting a three-week high, on hopes that talks between China and the United States would result in settlement of some disputes. The most-traded iron ore contract on the Dalian Commodity Exchange, for January 2020 delivery reversed course from a 2.6% drop in morning trade, closing up 1.1% at 658 yuan ($92.48) a tonne.

The most-active construction steel rebar contract on the Shanghai Futures Exchange, for January delivery, inched up 0.1% to 3,415 yuan a tonne. The smog-prone northern city of Tangshan, which has an annual steel production more than the whole of the United States, continued output curbs for industrial firms after the week-long holiday and requested sintering output to be reduced by 50%.

China's top steelmaking province of Hebei launched a second round of environmental audits from Oct. 10 for over two months, with a focus on reviewing anti-pollution implementations and resolutely oppose "one-size-fits-all" measures, local media Hebei Daily reported. China's Ministry of Ecology and Environment said last month it would set stricter targets for polluting cities for this autumn-winter heating season that had higher concentrations of damaging particles last year.

Benchmark spot 62% iron ore for delivery to China sat tight for a third day at $94 per tonne on Wednesday. Hot-rolled coil, the steel used in cars and home appliances, fell 0.4% to 3,399 yuan a tonne. Shanghai stainless steel futures, for February 2020 delivery, edged up 0.6% at 15,765 yuan.

Other steelmaking raw materials were mixed, with Dalian coking coal trading up 0.1% at 1,254 yuan a tonne, while coke slid 0.2% to 1,858 yuan The world's No.4 iron ore producer Fortescue Metals Group sees China's steel demand to increase 7-8% in 2019, its CEO Elizabeth Gaines said on Thursday. The United States is weighing a currency pact with China as part of a partial deal that could see a planned tariff hike next week being suspended, Bloomberg reported on Wednesday citing sources.