SINGAPORE (BLOOMBERG) - Iron ore futures leaped higher as trading opened on Monday (May 10), extending a record run amid rampant Chinese demand and a wider surge in commodity prices as the global economy recovers.

Futures in Singapore jumped more than 10 per cent to hit a fresh record high of US$226 (S$299) a ton. The steelmaking raw material is surging as strong demand from top buyer China leaves supplies stretched. Prices breached US$200 for the first time only last week.

"This sector is very, very hot, and just when China's steel demand impulse will ease is perhaps the biggest question of 2021," Vivek Dhar, commodities analyst at Commonwealth Bank of Australia, said in Bloomberg Television interview. "Supply is still not able to meet that strong demand."

Iron ore is just one of a sweep of materials from copper to crops that have marched higher in recent months. Bloomberg's gauge of spot commodity prices finished last week at its highest in nearly a decade. Copper also extended its record rally on Monday, soaring to US$10,500 a ton in early trade.

Steel prices have jumped in China as heavy users like the construction and manufacturing sectors enjoy a busy period, as well as enjoying tailwinds from stimulus measures. Steelmakers in the rest of the world such as ArcelorMittal are also enjoying a boom as markets bounce back from the pandemic.

"There is a chance that ex-China demand can come back to such an extent that we still see steel demand pick up globally and that will see iron ore demand remain at these elevated levels," CBA's Mr Dhar said.