Reuters reported that Mitsui OSK Lines Ltd operator of the world's biggest fleet of bulk carriers for shipping iron ore and coal sees recovery in Chinese steel market, which would help in sea borne trade of raw materials.

Mr Masafumi Yasuoka senior managing executive officer of Mitsui OSK said that demand for steel is recovering in China due to the government's economic stimulus package.

He said that “It is prompting small steel mills to increase spot purchases of iron ore from Brazlil's Vale and Australia's BHP.”

He added that "Chinese mills need to buy more iron ore, due to the economic package. That in turn has made some iron ore miners bullish in price talks on iron ore with mills.”

He however expects China's big steelmills like Baosteel Group to start buying iron ore after the 2009/10 contract price is set, pushing up the freight rates further after April.

(Sourced from Reuters)