Iron ore futures climbed to multi-month highs on Tuesday, with sentiment boosted by upbeat economic data in top consumer China and mounting expectations of a flurry of pre-holiday replenishment from steelmakers in the coming weeks.

The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) DCIOcv1 ended daytime trading 2.93% higher at 1,002 yuan ($140.58) a metric ton, the highest since August 2021.

The benchmark February iron ore SZZFG4 on the Singapore Exchange climbed 2.35% to $142 a ton, as of 0700 GMT, the highest since June 2022.

China’s factory activity expanded at a quicker pace in December with the Caixin/S&P Global manufacturing purchasing managers’ index (PMI) rising to 50.8 last month from 50.7 in November, marking the fastest expansion in seven months and surpassing analysts’ forecasts of 50.4.

This came after the official PMI fell to 49 in December from 49.4 the previous month, raising the case for fresh stimulus measures this year, official data showed on Sunday.

Expectations of more stimulus in 2024 mounted after China’s President Xi Jinping said on Sunday that China would consolidate and enhance the positive trend of its economic recovery this year.

Supporting prices of the key steelmaking ingredient is also mounting expectation of mills returning to the market to restock raw materials to meet production needs during the Lunar New Year holiday break in February, said analysts.