Iron ore hits highest in a month on hopes China’s demand improving

Iron ore touched its highest in nearly a month as traders bet on a modest improvement for China’s steel market.

Futures in Singapore rose the previous four trading days and are up more than 6 per cent this week due a tick-up in demand and hopes for a stimulus boost at a major Chinese political gathering - known as the Third Plenum.

The steelmaking ingredient is now solidly above $US110 ($A163) a tonne after trading below that threshold for most of June.

Iron ore has rebounded from below $US100 ($A148) a tonne in May, after the government unveiled a rescue package for the key property sector.

But real estate prospects are still murky and attention is focused on what policies emerge from the Third Plenum in mid-July, where China’s Communist Party elite will flesh out long-term goals.

Mills still have appetite for iron ore with their furnace run-rates at high levels and there has been a recent rebound in steel demand, Chaos Ternary Research Institute said a note.

Expectations for China’s economy are improving ahead of the July meeting, it added.

Futures in Singapore were little changed to $US113.45 ($A168.93) a tonne as at 11:35 am local time, after gaining as much as 0.4 per cent earlier. Dalian prices dipped slightly while steel futures were little changed in Shanghai.