(Bloomberg) -- Iron ore futures in Singapore jumped nearly 10% as optimism over a bout of restocking by China’s steel mills added to tailwinds from the risk-on mood in global markets.

Prices rebounded from Friday’s pandemic-driven losses alongside a rally across commodities from nickel to crude oil on bets the impact of a new coronavirus variant may not be as severe as initially feared. As well as a broad recovery for risk assets, iron ore is benefiting from signs that pressure on China’s steel production is easing.

“Iron ore demand fell to a three-year low at the start of this month,” Mysteel wrote in a research note. “Now the expected resumption of steel output in December is affecting market sentiment and changing the market trend.”

The Shanghai-based research group said pig iron output would rise by 37,000 tons a day by the end of December as 16 idled and two overhauled blast furnaces were restarted. That’s a relatively small amount, but could mark an inflection point after months of pressure on steel output.

Iron ore has had a wild year as a first-half demand boom was quashed by China’s squeeze on real estate finances that drove a fall in construction activity, as well as a government push to curb pollution and emissions. Steel output slid to the lowest since 2017 in October, and Singapore futures plumbed an 18-month low earlier in November.

Prices on the Singapore Exchange climbed as much as 9.6% to $105.50 a ton, before trading at $102.90 by 3:31 p.m. local time. Iron ore in Dalian rose 6.8%.

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