The price of iron ore is on the rebound, moving past $US62 a tonne.
Benchmark iron ore for immediate delivery to the port of Tianjin in China was last trading at $US62.10 a tonne, a rise of 1.1 per cent.
This is 33 per cent higher than the record low the commodity hit in April of $US46.70.
The most recent price hike is said to be due to falling iron ore inventory at Chinese ports.
Inventory of imported iron ore at 44 Chinese ports dropped 1.3 million tonnes to 85.4 million tonnes as of May 29, the lowest since December 2013, Reuters reported.
But most analysts believe the price rise will be short-lived.
“The trend is likely to continue in the short term, but I believe the supply will resume to high levels in coming months,” a Shanghai-based iron ore trader said.
Speaking in Sydney last week, China Metallurgical Industry Planning & Research Institute’s president Xinchuang Li predicted a plateau for the iron ore price in the coming years.
Li said China, which consumes 60 per cent of the world’s iron ore, is in a slowdown which will become the “new normal”.
Li said this will affect Australian iron ore miners as the nation shifts from its heavy industrial phase into a more services focused era.
“We’re likely to see a price of between US$55 to US$65 per tonne as an average for the next two years,” he said.
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.