'Stronger for longer': Iron ore price hits 3-week high as Chinese imports jump 22%

The price of iron ore jumped 1.3% or $1.70 on Monday to reach a more than 3-week high despite persistent predictions of a sharp correction in the price of the steelmaking raw material.

The benchmark CFR import price of 62% iron ore fines at China's Tianjin climbed to $137.60 its best level since March 13 and up over 55% up from three-year lows reached in September according to data provided by SteelIndex.

The improvement came on the back of a new report showing China imported 19 million tonnes of iron ore from no. 1 supplier Australia in March, a 22% increase on February's figure.

Jay Hambro, chairman of Russian iron ore miner IRC, told the BBC in an interview on Monday that he believes that the iron ore price is "going to stay stronger for longer".

The reason is that despite rising output, it is in the best interests of the world's Big 3 producers – Rio Tinto (LON:RIO), BHP Billiton (LON:BHP) and Vale (NYSE:VALE) – not to let prices flounder because they are dependent on iron ore for the bulk of their earnings.

For the world's top five diversified miners iron ore contributed two-thirds of pre-tax profits and for world number two Rio Tinto that portion is upwards of 80%.

The iron ore production world is highly concentrated, the big three control more than 60% of the 1 billion tonne-plus seaborne trade.

Add Anglo American (LON:AAU) and Fortescue Metals (ASX:FMG) that portion rises to close to 75%, giving the globe's top producers a great deal of pricing power.

SLIDESHOW: 2-minute history of the iron ore wars