Economic Times reported that iron ore is rallying the most in about 2 years as analysts predict that China, the biggest buyer, will import a record amount in 2013 as its accelerating economic growth spurs demand for steel.
According to the median of 10 analyst estimates compiled, trade to China will climb 6.9% to 778 million tonne in 2013, or 65% of all shipments.
Morgan Stanley data said that Seaborne demand will exceed supply for at least a 10th year.
According to Justin Smirk of Westpac Banking, who correctly predicted this year's slump, prices will climb as much as 26% to USD 170 a tonne by June.
Prices tumbled to a three year low in September as China slowed for seven consecutive quarters, before rallying 56% since then on mounting confidence the nation's growth will accelerate for at least the next six months.
analyst said that the rebound will boost earnings for suppliers and Vale, the biggest exporter, is expected to report a 19% increase in profit next year.
Mr Smirk, the economist at Westpac in Sydney who beat as many as 25 others in predicting metals prices for two consecutive quarters on a rolling two year basis said that "We're confident to stay bullish for now."
He said that "We're seeing the recovery come through in China. They've made a switch to their policy adjustments from being contractionary to be more stimulatory. Ore at China's Tianjin port, a global benchmark, was last at USD 135.40, for an annual drop of 2.2% and a Q4 average of USD 119.56.”