Iron ore headed for its best week in two years on speculation that China’s economy may be on the mend, buoying the outlook for demand.

Futures in Singapore - which touched as much as US$111 a tonne on Friday - are up nearly 13% this week, the best showing since March 2022. Banks including Goldman Sachs Group Inc have been upgrading their outlooks for China’s growth this year after factory activity and exports accelerate more than expected.

The steel-making commodity suffered from a brutal slump in the first quarter, sinking below US$100 a tonne, on signs that global seaborne supplies were running ahead of demand as China battled a persistent property crisis. While real estate has yet to see a clear turnaround, other macro prints have pointed to a revival in broader conditions. The country is the world’s largest iron ore importer, and plays a pivotal role in the market supplied by pits in Australia and Brazil.

Iron ore’s nascent revival has helped to lift miners’ shares. In Australia, BHP Group Ltd capped a fourth weekly advance, while Rio Tinto Group and Fortescue Ltd have also climbed.

Iron ore - which advanced on Friday along with other commodities including copper and crude - traded 2.3% higher at US$110.75 a tonne at 2.33pm in Singapore. In China, yuan-priced iron ore futures in Dalian and steel contracts in Shanghai headed for weekly gains.

  - Bloomberg