Iron ore futures clung to modest gains on Monday amid optimism over top global steel producer China’s policy support for its struggling property sector.

China is set to take further action, including relaxing home-purchase restrictions, as it scrambles to tackle a deepening crisis in its debt-riddled property sector, Reuters reported on Friday, citing four people familiar with the matter.

The report came after regulators last week relaxed criteria for first-home mortgages, while some cities in China said they would allow home buyers to enjoy preferential loans for first-home purchases regardless of credit records.

Iron ore’s most-active October contract on the Singapore Exchange was up 0.4 per cent at $114.40 per metric ton, as of 0708 GMT, after earlier hitting $116.10, its strongest since April 3.

The most-traded January iron ore on China’s Dalian Commodity Exchange ended daytime trade 0.1 per cent higher at 844.50 yuan ($116.20) per ton, off a contract high of 865.50 yuan hit earlier in the session.

Further “upside shocks in response to more dovish property policy measures” in China were supporting iron ore, Navigate Commodities Managing Director Atilla Widnell said.

Adding to the upbeat sentiment, Chinese developer Country Garden won approval from its creditors to extend payments for an onshore private bond, Reuters reported.

Without additional support from fundamentals, however, “iron ore prices should eventually gravitate lower back into our medium-term target range ($92-$108/ton) – once financial markets have “scratched their itch” on hopes and dreams of more stimulus”, Widnell said.

Other steelmaking ingredients on the Dalian exchange extended their rally, with coking coal advancing 5.1 per cent as mine safety checks in China fuelled worries about supply.

Dalian coke climbed 2.7 per cent.

Steel benchmarks in Shanghai were firmer. Rebar gained 0.4 per cent, hot-rolled coil added 0.2 per cent, wire rod climbed 1.3 per cent and stainless steel advanced 0.3 per cent.