Bloomberg reported that OneSteel Limited said iron ore prices will further rise in 2012 as inventories in China remain low and demand for the raw material used in steelmaking recovers.

Mr Peter Smedley chairman of OneSteel said that "The fundamentals for strong demand from China remain sound, and we have been encouraged with the recovery in iron-ore prices from their recent lows over the last few weeks."

Mr Smedley said that "In Australian steel, we are currently not seeing any improvement. We are expecting conditions to remain challenging for these businesses over the remainder of the financial year."

OneSteel is relying more on iron ore sales as the Sydney based company and bigger rival BlueScope Steel Limited slash jobs to battle higher production costs and lower selling prices of steel in the domestic market.

(Sourced from www.bloomberg.net)