Chinese iron ore futures rose more than 4% on Tuesday, extending gains into a fourth session, as steel mills restocked raw materials even though top steelmaking cities carried out anti-pollution curbs.
The most-traded iron ore futures contract on the Dalian Commodity Exchange for January 2020 delivery rose as much as 4.2% to 644 yuan ($90.80) a tonne before closing at 638 yuan.
"Iron ore prices fell steeply recently, hurt by macro-economy and consumption pessimism," Zhao Yu, an analyst from Huatai Futures said, adding that increasing supplies also dragged down prices.
Dalian iron ore plunged more than 21% in August, its biggest monthly drop since March 2018.
But iron ore prices are not expected to rise too much as overall demand remains stable, according to Zhuo Guiqiu, an analyst from Jinrui Futures.
"Tangshan is extending its production restrictions in September, but the intensity is at the same level with August," Zhuo said.
The major steel-producing city of Tangshan ranked the third last polluter in August among the 168 top cities monitored across China, logging the best air quality of its historical average, the city administration said in a statement on its website on Monday.
The city has asked steel mills to implement production curbs for sintering and blast furnaces in September and strengthen the restrictions during September 28 and October 4, near to China's celebration of the 70th anniversary of establishment on October 1.
Benchmark 62% iron ore for delivery to China, as assessed by SteelHome consultancy, settled at $89 a tonne on Monday.
The most-active construction steel rebar contract on the Shanghai Futures Exchange settled up 1% at 3,403 yuan a tonne.