Iron ore price starts November with a bang

The price of iron ore jumped to a 2-month high on Monday after new data showed the global steelmaking industry is in better shape than previously thought.

The benchmark CFR import price of 62% iron ore fines at China's Tianjin rose to $135.90 a tonne on Monday to a level last seen September 5 and bringing its gains over the two trading sessions this month to 3% according to data provided by SteelIndex.

Other industry pricing points also rebounded with FOB Brazil 62% gaining $7.42 or 7% last week.

The resurgent iron ore price comes after a new report from World Steel Association showed global crude steel production in September rose to a rate of 4.42 million tonnes per day – a robust 4.6% month-on-month increase and 6.1% jump over last year's figures.

September is usually a strong month for steelmakers as they emerge from the summer doldrums and China managed to top its already record setting pace in September.

China already forges almost as much steel as the rest of the world combined and the 2.18 million tonnes daily run rate translates to whopping 11% year on year growth and a 8.4% jump so far in 2013.

World number two producer Japan upped output 4.9% month over month and now sits 5.5% above last year’s figures. The US managed to better last year's performance by 6% while India added 4.7%.

Even underperformer Europe came back with Germany really shooting the lights out, increasing monthly output by 17.8%, bring the world's fourth largest steel producer's year-on-year growth performance to 1.4%.

The rise in the price of iron ore comes despite a fall in the price of Chinese rebar to a four month low last week and an increase in stockpiles of the steelmaking raw material at Chinese ports.

Inventories at China's 25 largest ports increased by 1.2 million tonnes to 76.5 million last week, but the stockpile only accounts for between 60% – 70% of the country's monthly consumption, down from more than 80% this time last year and 100% in 2011.

Iron ore is now up 23% from its 2013 lows struck at the end of May defying predictions of a downturn in prices as new supply comes on stream through 2017 and number one consumer China slows down.