Benchmark iron ore (with 62 percent iron content) has rebounded to $104.20 per metric ton after falling to a three-year low of $86.70 last month.
Trading has been muted this week, however, as most Chinese steel mills are closed for the country’s National Day holiday. That has led some traders to believe that iron ore could move higher still in the coming days as steelmakers reopen and replenish their iron ore supplies.
“More than 50 percent of mills, traders and banks think iron ore prices will rise when the Chinese return next week,” one trader told Reuters.
However, whether the price will continue to rebound remains uncertain as China, the world’s largest iron ore consumer, continues to see slower economic growth. This week, ratings agency Standard & Poor’s said that while there could be an incremental recovery in iron ore prices over the next two years, they could fall below $100 beyond 2015 as new production from Brazil and Australia adds to global inventories.