Australia's iron ore (62% Fe, CFR China) price on December 18 slightly increased by US$1.1 to US$106.75, which not only rebounded above US$106, but it also marked a two-week high since December 3.

Chinese steel mills have started winter restocking of iron ore as the Lunar New Year approaches in less than two months. Meanwhile, China’s coking coal and coke futures continued to post gains, boosting market sentiment and pushing ferrous commodities higher. Spot steel prices also rose, leading iron ore prices to climb in tandem.

According to market participants, China’s average daily hot metal output has declined to about 2.28 million tons but remains at a historically high level for the same period. Although steel mills continue to adopt a cautious purchasing strategy, their iron ore inventories are relatively low. Supported by winter stockpiling demand, iron ore prices are expected to fluctuate at elevated levels in the short term.