China's iron ore futures soared nearly 7 percent Friday, with steelmakers eyeing high-grade ore to boost output and continuing to cash in on firm demand for the building material in the world's top producer.
The steelmaking raw material outpaced gains in rebar steel, which rose almost 3 percent.
"It's a little hard to buy high-grade iron ore at the ports," said an iron ore trader in Rizhao, a port city of East China's Shandong Province.
"Supply is still the same as in the past month, but the demand for high-grade is increasing."
The most-traded iron ore on the Dalian Commodity Exchange (DCE) closed 6.6 percent higher at 580.50 yuan ($87) a ton, adding to a nearly 6 percent spike Thursday. The contract rose for an eighth straight week, gaining 1.4 percent.
Stockpiles of imported iron ore at China's ports dropped to 135.2 million tons on Friday from 137 million tons in the previous week, according to data tracked by SteelHome.
While not far below the record 141.45 million tons reached in June, only about one-fifth of that inventory is comprised of the high-quality Australian iron ore fines that many Chinese mills prefer, said the Rizhao-based trader.
Iron ore for delivery to China's Qingdao port in Shandong jumped 3.3 percent to $75.41 a ton on Thursday, according to Metal Bulletin.
The spot benchmark was up slightly for the past week, and was on course for a sixth consecutive weekly increase.
The most-active rebar on the Shanghai Futures Exchange rose 2.6 percent to settle at 3,895 yuan a ton.
Coking coal, another steelmaking ingredient, surged 4.4 percent to end at 1,482.50 yuan per ton on the DCE. It touched a record high of 1,488.50 yuan earlier in the session.
