SINGAPORE: Iron ore futures pared losses on Tuesday, advancing back up to two-month highs as demand for finished steel products for construction increases in China. The most-traded May iron ore contract on China’s Dalian Commodity Exchange (DCE) traded 1.56% higher at 12.5 yuan ($1.82) a metric ton, as of 0315 GMT. The benchmark April iron ore on the Singapore Exchange was 0.79% higher at $108.35 a ton. Electric-arc-furnace steel mills in China have intensively resumed production of rebar and wire rod rolling lines, driving up the capacity utilization rate as of March 16, with production for both products expected to continue to increase this week, a note from Shanghai Metals Market said. In terms of downstream demand, construction activities have also resumed, thereby supporting demand for finished steel products and improving destocking, the note added. A global rebound in shipments will exert downward pressure on iron ore futures, but a short-term decline in port arrivals, which coincides with a recovery in hot metal production, is expected to drive continued destocking of port inventories, a note from commodity data group SunSirs said. The total amount of iron ore arriving at 47 Chinese ports decreased by 3.805 million tons from March 9-15, while global iron ore shipments, as well as shipments from Australia and Brazil, increased during the same period, according to data from consultancy Mysteel. Thus, the strength of demand for finished steel products and prevailing profit margins will ultimately determine iron ore prices in the near-term, the note added. An average of 39% of Chinese steelmakers were operating at a profit in the first two months, a drastic fall from 21.6% over the same period the year before, according to Reuters calculations based on data from consultancy Mysteel. Other steelmaking ingredients on the DCE languished, with coking coal and coke down 0.59% and 0.29%, respectively. Steel benchmarks on the Shanghai Futures Exchange mostly gained. Rebar firmed 0.29%, hot-rolled coil added 0.27%, and stainless steel hardened 0.21%. Meanwhile, wire rod added 0.21%.