MANILA: Iron ore futures in China rose for a fourth straight session on Thursday to hover near a 26-month high on firm demand for high-grade material as Chinese steel producers boost productivity to use less coal.

The spot price for high-grade iron ore rose to the highest since April and its premium to low-grade material widened to the most in a month.

“I don’t think there’s a shortage in high-grade (iron ore) but demand for high-grade is big because of costing factors,” said a Shanghai-based iron ore trader.

Iron ore for January delivery on the Dalian Commodity Exchange closed up 0.7 percent at 478.50 yuan ($71) a tonne. Earlier in the session, it touched 484.50 yuan, close to Wednesday’s peak of 487.50 yuan, which was highest since August 2014.

The gains in iron ore came despite a selloff in coal futures following a rapid rally as government-led capacity cuts have prompted a shortage of coal in China, including coking coal and coke used to make steel, lifting prices to multi-year highs.

“I don’t think in the next couple of months we have any solution for the coal problem,” the trader said.

Coking coal closed down 3.5 percent at 1,244 yuan a tonne, after hitting a contract high of 1,332 yuan in the previous session. Coke dropped 1.9 percent to 1,675 yuan per tonne, after peaking at 1,765 yuan on Wednesday, its highest since August 2013.—Reuters