Iron ore jumped the most since October amid speculation that a collapse in prices for the steelmaking raw material is spurring a surge in demand.
Ore with 62 percent iron content climbed 4.2 percent to $116.60 a dry metric ton at Tianjin in northeast China, according to prices from The Steel Index Ltd. That’s the biggest gain since the 6.2 percent increase on Oct. 9.
Stronger demand spurred the rebound, Ben Goggin, a London-based broker of iron-ore swaps at ICAP Plc, said by e-mail today. Traders began increasing purchases on May 31, when the price slumped to $110.40 a ton, the lowest in almost seven months, he said.
“It appears that traders are diving in,” Goggin said by e-mail today. “It looks like they are making a play based on the expectation that it dropped to a level and found support.”