The iron ore price rose on Friday as China’s move to slash borrowing rates and shrinking stockpiles of the steelmaking raw material buoyed sentiment.

Futures in Singapore surged more than 6% after midday trading, marking its largest daily increase since mid-March. Prices on the Dalian exchange climbed 3%.

Chinese banks cut a key interest rate for long-term loans by a record amount on Friday, a move that would reduce mortgage costs and may help counter weak loan demand.

Meanwhile, iron ore stockpiles at major Chinese ports dropped for an eighth consecutive week, according to Mysteel data compiled by Bloomberg.

The nation’s Covid Zero strategy and a prolonged property slump have damped demand in the construction sector, a key pillar of steel consumption.

While “the stringent virus restrictions have reduced market confidence,” a return of consumption can be expected in the medium-term as China unleashes stimulus, Huatai Futures wrote in a note.