Iron ore on track to recover price after expected rise in steel demand

Iron ore climbed to its highest level in seven months, replacing its quarterly decline. The rise came on speculation that China could speed up construction projects and take action to combat a slowdown in economic growth from the world's largest iron ore buyer.

Benchmark trades iron ore for immediate delivery to the port of Tianjin in China at $ 117.60 a tonne, up from $ 116.80 from the previous session. Reports have emerged that the Chinese government is under pressure to tackle the weakening economic growth amid deepening public concerns. It is noted that the nation will miss its 7.5 percent growth target this year, the weakest annual rate since 1990.

China is expected to speed up the preliminary work and construction of key investment projects. Steelmakers are making a notable return to the market with increased purchase inquiries. The market opened with a healthy start this week with more confirmed trades.

An environmental ban on highly polluting Chinese metallurgical plants will not be able to curb the growth in domestic metallurgical production or reduce maritime imports of iron ore, which are projected to rise as early as 2014 to a record 921 million tons. Smelters in some regions of China have cut capacity, as well as non-working coke oven batteries, which are seen as a source of toxic smog in Beijing and Shanghai.