The price of iron ore has surged past $US52 a tonne for the first time since late March.
At the end of last session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US52.90 a tonne.
The bounce comes after the commodity reached its lowest level since 2005 on April 2 of $US46.70 a tonne.
Helping the recovery was BHP Billtion's revelation yesterday that it would slow its ramp up to 290 million tonnes of iron ore production a year.
In its March quarterly report, the miner said it would defer a planned inner harbor debottlenecking project which would have increased production by 20 million tonnes a year by 2017.
Despite this, BHP raised its production target guidance for 2015 from 225 million tonnes to 230 million tonnes.
The miner also revealed it produced 58.979 million tonnes of iron ore in the March quarter, a 20 per cent increase on the previous corresponding period.
Year-on year, BHP has produced 172.422 million tonnes, 17 per cent more than at the same time last year.
Meanwhile Rio Tinto and Brazil’s Vale also recorded record production numbers, causing some analysts to suggest the price rise won’t last.
“We haven’t bought cargoes for two weeks now. The market seems to be recovering but longer term we think the price will still go down, so it’s a little dangerous for us to buy now,” a trader in China’s eastern Shandong province told Reuters.
Weak growth data out of China is still a cause of concerns for investors.
“With concerns varying from a slowdown in construction activity to fears of a potential bubble building in the property sector, demand for steel is expected to remain under pressure as investors temper their outlook,” Sucden Financial analyst Kash Kamal said.