Shanghai rebar futures rose to two-month peaks on Monday, showing that there was room for iron ore prices to sustain recent gains as firm Chinese demand lifted key indexes to their highest since May.
Chinese steel mills, the biggest buyer of the world''s iron ore, had been replenishing stocks of the steelmaking raw material ahead of the Lunar New Year in February and stronger steel prices had also supported the buying binge.
The most active May rebar contract on the Shanghai Futures Exchange hit a high of 4,851 yuan per tonne in morning trade, a level last seen on Nov. 11.
All the three major iron ore indexes touched new eight-month highs at the close of trade on Friday.
The Platts 62 percent iron ore index IODBZ00-PLT rose $1 to $175.50 a tonne, cost and freight, and the Steel Index 62 percent benchmark .IO62-CNI=SI climbed $1.3 to $172.60.
Metal Bulletin''s 62 percent gauge .IO62-CNO=MB jumped more than $2 to $171.43.
Forward swaps retreated as investors locked in recent sharp gains.
The January contract , cleared by the Singapore Exchange, slipped $1.50 to $173 a tonne and the February contract fell $2.20 to $170.50. March dropped nearly $3 to $168.88.