(Bloomberg) -- Iron ore surged on expectations a recovery in economic growth, including additional support from the Chinese government, will boost demand for steel. 

Futures in Singapore rebounded as much as 10% as a potential boost to the U.S. vaccination drive lifted sentiment across assets from stocks to base metals. Separately, China’s central bank chief vowed to stabilize the supply of credit and boost the amount of money supporting smaller businesses and the real economy after both credit and economic growth slowed in July. 

In China, “people are hoping for some further stimulus targeting the infrastructure sector, as real estate and manufacturing are looking bleak,” said Erik Hedborg, principal analyst at CRU Group. “In the rest of the world, we are seeing steel production stabilizing at levels below pre-pandemic levels.”

Iron ore has had a spectacular collapse, losing about a quarter of its value in the past month, as China’s push to reduce steel production hammered demand. Iron ore stockpiles at the country’s major ports expanded 1.3% last week, signaling a softening in consumption, while steel output fell in July. 

Market watchers have pointed to more volatility to come amid a complex policy backdrop in China, as well as an uneven global recovery.

Iron ore in Singapore was up 10% at $149.65 a ton by 11:35 a.m. London time, after falling 2.1% on Monday. Futures in Dalian closed 8% higher. Rebar and hot-rolled coil climbed over 2.5% in Shanghai.

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