MANILA: Dalian iron ore futures edged higher on Tuesday, with the benchmark contract hitting a record high, as the steelmaking ingredient tracked buoyant steel prices in China, though regulatory concerns limited gains.

Sentiment was propelled by improved demand prospects as China has entered its peak spring construction season and with more evidence of economic recovery for the world’s top steel producer and iron ore consumer.

The most-traded May iron ore on China’s Dalian Commodity Exchange ended morning trade 0.4% higher at 926 yuan ($134.75) a tonne. It hit 936 yuan earlier in the session, a new high for the contract. Benchmark April iron ore on the Singapore Exchange was up 0.1% at $131.60 a tonne, as of 0357 GMT, after it earlier touched a fresh three-week high of $132.40.

On the Shanghai Futures Exchange, the most-active rebar and hot-rolled coil contracts both climbed as much as 0.9% to their highest levels since June.

“Data shows steel and iron ore inventories at China’s mills are sliding, with China’s construction period traditionally running hot from March through to June,” broker SP Angel’s analysts said in a note.

Chinese steelmakers will need to lift their iron ore replenishment volumes this month to feed blast furnaces that have been brought back online following maintenance shutdown, Mysteel consultancy said. Declining iron ore portside inventory in China, which hit a four-week low of 138.6 million tonnes last week, based on SteelHome consultancy data, added to the market optimism, analysts said. However, traders exercised caution as Chinese regulators may take steps to curb iron ore prices, having warned against excessive price speculation and hoarding.—Reuters