Iron ore prices surged back above the US$106 threshold yesterday (December 22), reaching US$106.65/ton for 62% Fe grade iron ore fines from Australia delivered to China. This recovery came after a positive weekly performance where prices climbed by 1.7% despite a drop last Friday.

The increase was due to China’s steel stockpiles falling for the tenth consecutive week, which triggered a rebound in black commodity futures. Besides, rising prices for coking coal and coke, combined with Japanese blast furnaces increasing their purchase rates, provided strong upward momentum.

Although port stocks are growing, steel mills currently hold lower inventories. Market participants expect a volatile near-term outlook as increased shipments from miners meet cooling demand and scheduled maintenance at Chinese steel plants.