Iron ore has seen a minor rally in price, leaping above the US$60 per tonne watermark overnight.
The price jumped to US$61.18 in Chinese ports according to the AFR, rebuilding some of the losses made last week after it fell to a fortnight trading low of US$58.40 per tonne.
Part of this return has been pegged to dents being made in the oversupply of iron ore at Chinese steel mills.
Iron ore entered 2015 valued at $US71.26 per tonne after a horror 2014 which saw it lose 47 per cent of its value.
But the price soon started to head south at a pace no one accounted for.
By April 2, iron ore was trading at a record low of $US46.70 per tonne, forcing companies to mothball operations and cut thousands of jobs.
In the same month, from April 16, iron ore made a 33 per cent rally which saw it rise above $US60 per tonne again.
But throughout the rise, analysts sounded cautious warnings that the price hikes would not last.
Westpac economist Justin Smirk said with demand out of China unclear coming into the New Year, and high volumes of iron ore being exported to the country, price volatility would continue.
Just this week, most have come out to reiterate their positions that the commodity won’t see any real gains for some time to come.
Citi says the rally in iron ore prices has peaked and forecast sub $US40 prices of the second half of 2015.
Ratings agency Fitch also cuts its iron ore price predictions to $US50 per tonne yesterday.
Even the Federal Government is bearish, forecasting an iron ore price of $US48 a tonne for 2015-16.
This current surge is expected to soon recede as China’s steel industry reaches its annual peak period, with the country also making protectionist moves to support its own flagging iron ore industry through a series of tax cut measures.
Added to this downwards pressure is the recent agreement between Vale and China, which will add a further 90 million tonnes annually to the seaborne market.
Closer to home, the mooting of a potential iron ore inquiry, examining concerns regarding oversupply, have caused increased anxieties in the local market for smaller players in the market.