The price of 62% Fe grade iron ore fines from Australia shipped to China increased to US$103.9 yesterday (January 28), ending a recent decline. This recovery was due to a 0.6% increase in Chinese industrial profits, which stopped a three-year downward trend.

In addition, a slowdown in falling steel prices and growth in coking coal futures provided additional support for the raw material.

In spite of this daily increase, iron ore has dropped by 2.44% since this year. Although record-high port inventories in China create price pressure, steel mills currently hold only 93.89 million tons of stock, which indicates a potential demand for 15 to 16 million tons of replenishment before the upcoming Lunar New Year holidays.

Market participants expect prices to fluctuate in the short term as these supply and demand factors interact.