Iron ore prices increased again yesterday (May 13), surpassing the US$113 level just one day after a brief decline. The price of Australia's 62% Fe grade iron ore fines delivered to China rose by US$0.85 to reach US$113.15 per ton, nearing a 22-month high. This recovery persists despite a general downturn in Chinese steel spot prices and other black commodities.

Rising ocean freight rates, driven by higher oil prices amid ongoing Middle East tensions, provide strong cost support. Additionally, improved profit margins at Chinese steel mills have increased their tolerance for expensive raw materials, which has also driven iron ore prices to hike.

Although high port inventories and peaking molten iron production cap further gains, a stronger Chinese Yuan continues to support prices. Market participants expect a volatile, high-range trend in the short term as high costs counteract inventory pressures.