Iron ore surged on back of very strong indicators out of china improved factory activity and rising home sales.

Iron ore jumps on China data, bullish steel demand outlook

BEIJING, March 1 (Reuters)-Iron ore futures jumped on Wednesday, as better-than-expected China manufacturing activity data raised prospects of a pickup in demand from the world's top steel producer.

The most-traded May iron ore futures contract on the Dalian Commodity Exchange (DCE)DCIOcv1was 1.97% higher at 904.5 yuan ($130.62) a tonne, as of 0215 GMT, after closing about 0.8% lower in the previous session.

On the Singapore Exchange, the benchmark March iron oreSZZFH3was up 1.18% at $125.55 a tonne, extending gains.

China's manufacturing purchasing managers' index (PMI)climbed to 52.6 last month, the highest reading since April 2012, up from 50.1 in the previous“

We believe the better-than-expected data has injected some confidence into the market. Also, the expectation of continued improvement in downstream (steel) demand loop lent support to the prices of raw materials including iron ore," said Yu Chen, a Shanghai-based senior iron ore analyst at consultancy Mysteel.

Chinese steel mills are expected to replenish iron ore inventories to meet production needs after some mills resumed production, analysts from Huatai Futures said in a note, adding that the hot metal output had improved steadily.

Coking coal and coke, also steelmaking ingredients, showed signs of strength. Coking coalDJMcv1rose 0.59%, while cokeDCJcv1grew 1.93%.

https://www.nasdaq.com/articles/iron-ore-jumps-on-china-data-bullish-steel-demand-outlook