Miners made strong gains today after iron ore prices hit four-month highs.
London-listed mining giant BHP Billiton ended the day 2.3% higher. Lesser known iron ore pellet producer Ferrexpo surged 5.6%. Brazil-listed miner Vale was 3.4% higher in early afternoon trade in Sao Paulo.
Steel futures in Shanghai jumped by as much as 7%, reaching a four-month high as the market reacted to production curbs on the part of the Chinese authorities.
The state-sponsored production cuts will take effect this winter across four separate Chinese provinces in a bid to lower air pollution.
Over the first half of the year, Chinese steel output expanded at its fastest pace since 2013 as producers struggled to keep up with orders.
Today´s surge follows the rally in Chinese iron ore futures seen at the end of last month after survey data showed China´s construction activity had reached its highest level in over three and half years.
China´s economy also grew by more than expected during the second quarter, with annual growth of 6.9%. Continued strength in the housing market was behind much of the positive surprise.
Iron ore prices have jumped by 40% since May, powered by the more favourable supply/demand outlook.
Among today´s strongest gainers was London-listed Ferrexpo, which produces iron ore pellets from mines located in Ukraine. The shares have surged 87% since mid-April.
Last week the company reported a 29% rise in half-yearly revenue and issued upbeat guidance for the rest of the year.