Iron ore prices rose back yesterday (December 1), rebounding above US$106/ton for the first time since late November. The price of 62% Fe grade iron ore fines from Australia delivered to China rose by US$1.3 to reach US$106.

This strength was supported by encouraging indicators from China’s manufacturing sector, as the Purchasing Managers' Index (PMI) for November showed improvement.

The recovering manufacturing climate subsequently drove domestic steel prices higher, which, combined with increased port clearances and solid trading volumes, provided firm support for iron ore demand.

The commodity has now posted three consecutive weeks of gains. However, market participants predict a short-term volatile trend due to rising port arrivals and reduced profitability for steel mills despite sustained high iron output.