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PrintReuters reported that spot iron ore jumped to 3 month high above USD 138 per tonne, spurred by Chinese mills replenishing winter supplies and traders anticipating further price gains amid a better outlook for the economy.
Shanghai steel futures rose to their highest since late September on Wednesday and iron ore futures in Dalian climbed to a one month peak. Iron ore swaps also stretched recent gains.
Mr Jamie Pearce head of iron ore broking at SSY Futures said that "I think there's a bit of a realization that the outlook on China for the next few months is not as bad as people anticipated."
A government index measuring China's manufacturing activity stayed at an 18 month high in November underlining the resilience of the world's No. 2 economy as Beijing seeks structural reforms.
According to data compiler Steel Index, Iron ore for immediate delivery into China's Tianjin port .IO62-CNI=SI rose 1% to USD 138.20 per tonne, the highest since September 3.
Iron ore, the top moneymaker for global miners Vale and Rio Tinto has traded in a tight range between USD 131 and USD 138 over the past three months and Tuesday's jump suggests there may be momentum to push the price above USD 140.
A Shanghai based iron ore trader said that "When you see an exuberance of this sort it usually lasts for about a week so I won't be surprised if USD 140 is breached soon adding mills were also building winter stockpiles.:
He said that "We have taken a lot of positions and we're holding about half a million tonnes. But it's not that easy to get some sales at good numbers."
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