Chinese steel futures rose on Thursday to their highest in nearly a week, benefiting from a strong demand outlook for 2021 and supporting Dalian iron ore above the 1,000-yuan mark.

Construction steel rebar on the Shanghai Futures Exchange jumped as much as 1.9% to 4,180 yuan ($639.87) a tonne. Hot-rolled coil climbed 1.2% to 4,450 yuan a tonne.

Both the benchmark contracts rose for a second consecutive session, with interest stronger in hot-rolled coil, the material used for car bodies and household appliances.

The China Association of Automobile Manufacturers has projected a 4% rise in vehicle sales next year to 26.3 million units in the world's biggest market, thanks to supportive government policies and automakers' discounts.

Analysts said upbeat Chinese economic data released earlier this week also continued to support ferrous metals. The November factory output grew at the fastest pace in 20 months as consumer spending and exports rose.

China's strong demand for steel products explained what some analysts described as the country's voracious appetite for key steelmaking raw material iron ore.

The most-active May iron ore contract on the Dalian Commodity Exchange edged higher by 0.7% to 1,007 yuan a tonne by 0235 GMT.