A cut by Rio Tinto Group to its full-year iron ore shipping guidance is set to bolster prices that have rebounded into a bull market on stronger-than-expected demand in China.

Iron ore futures in Singapore surged as the world’s No. 2 exporter flagged Tuesday that cargoes from Australia are expected at about 330 million metric tons in 2017. That’s down from its April forecast of 330 million-to-340 million tons.

“Expectations were too high on supply growth out of Australia,” Daniel Hynes, an analyst in Sydney at Australia & New Zealand Banking Group Ltd., said by phone. With record steel production in China “we’re seeing a readjustment on both sides of the market, which is supporting prices,” he said.

China’s imports of iron are on course to comfortably top 1 billion tons this year as rising steel prices support demand, helping to underpin demand for the raw material even as the top miners continue to raise supply. The recent gain in benchmark iron ore that’s lifted prices may last for some time, according to Barclays Plc.

Iron ore futures advanced as much as 6.5 percent Tuesday to $70 a ton in Singapore, headed for the highest since April. Ore with 62 percent content delivered to Qingdao rose 1.6 percent to $66.81 a dry ton on Monday, the highest since May 3, according to Metal Bulletin Ltd.

Rio fell 1.5 percent to A$64.94 in Sydney trading Tuesday. Forecasts for lower shipments of iron ore and coking coal may trim earnings, Shaw and Partners Ltd. said in a note.

Iron ore “shipments were impacted by an acceleration in our rail maintenance program following poor weather,” Chief Executive Officer Jean-Sebastien Jacques said in the statement. Rio also cut its forecast on 2017 coking coal production on the impact of a March cyclone in Queensland state.

Iron ore cargoes have been impacted by lingering effects of wet weather in Western Australia earlier this year, UBS Group AG analysts wrote in a July 11 note. The state had its wettest summer, which runs December through February, since at least 1900, according to Australia’s Bureau of Meteorology.

Rio shipments from Western Australia declined 6 percent to 77.7 million tons in the three months to June 30, from 82.2 million tons in the same period a year earlier, Rio said. That missed the median estimate of 81.8 million tons among four analysts surveyed by Bloomberg.

“We’re taking confidence from the price over volumes,” Melbourne-based Morgans Financial Ltd. analyst Adrian Prendergast said by phone. “There was a real concern when the iron ore price corrected a few months ago, but it’s rebounded much quicker than we expected.”

Output of steel hit a record last month in China as the nation’s gross domestic product topped estimates in the second quarter. Steel prices have been on a roll and reinforcement-bar futures have surged 27 percent on the Shanghai Futures Exchange this year.

Rio’s plans to carry out further rail maintenance this half will help improve future productivity, Morgans’ Prendergast said. Expected slower growth in China in 2018 is seen curbing demand and weighing on iron ore prices next year, according to Westpac Banking Corp.

It’s positive to see Rio take “a disciplined approach to supply that seeks to maximize the value of the total reserve base, rather than one which seeks to maximize volume,” Sanford C. Bernstein Ltd. analysts including Paul Gait said a note. Rio is forecast to produce 328.4 million tons in 2017, according to the average among seven analysts’ estimates compiled by Bloomberg. The producer shipped 327.6 million tons in 2016.

Coal Forecast

Rio’s hard coking coal output fell 14 percent on the impact of damage to infrastructure in Queensland caused by Cyclone Debbie in March, the worst storm to hit the state since 2011. Output of about 1.56 million tons missed a 2.1 million tons median estimate among four analysts.

The producer cut its forecast for 2017 coking coal production to 7.2 million to 7.8 million tons from an earlier estimate of 7.8 million to 8.4 million tons following the impact of the cyclone.

Mined copper output fell 6 percent to 124,700 tons, to miss a 126,000-ton median estimate among five analysts. Rio in April cut full-year guidance to between 500,000 tons and 550,000 tons after disruptions at the world’s two largest mines.