Iron ore prices exploded overnight, increasing by more than 5 per cent.
In the largest one-day gain since mid February, iron ore finished trading at $US59.70 a tonne – or 5.2 per cent higher.
The surge defies iron ore’s recent performance, with the commodity still more than 24 per cent lower than the 2017 peak.
However, Australia’s iron ore miners will welcome the improvement after experiencing extreme market fluctuations over the past year.
Last week Atlas Iron shelved development of its $53 million Corunna Downs project in the Pilbara region due to the recent fall in iron ore prices.
The Perth-based company had approved development of the project just four months earlier when iron ore prices were significantly higher.
A Patersons Securities note explained: “Chinese 62 per cent content iron ore fines prices surged by 5 per cent plus in Tuesday Asian markets, after equally solid gains in iron ore futures.
“A steady-as-she-goes speech by Chinese Premier Li at a World Economic Forum event in Dalian on the day would have helped.”
On the London Stock Exchange overnight, iron ore miners BHP and Rio Tinto both enjoyed gains as investors greeted the improved iron ore prices in Asian markets.