The Australian reported that consensus is growing that iron ore contract prices will rise next year, with Macquarie Bank analysts flipping their previous prediction of a slide.

Macquarie analysts, led by Mr Jim Lennon have boosted their forecast for Australian contract iron ore prices by 15% after settlement of this year's prices by BHP Billiton and Rio Tinto with Japanese and Korean steel mills.

Mr Lennon is expecting prices to rise 5% next year from a previous forecast of the equivalent of an 8% fall. He joins analysts at Credit Suisse and Goldman Sachs JBWere in predicting a price gain next year.

He said that "Unless spot prices rise significantly from current levels, this supply will not reopen. Prices may well have to rise to encourage supply to reopen in China when non-Chinese demand starts to recover."

The increased forecasts come as China holds out for a bigger cut in benchmark iron ore fines prices than the 33% drop other Asian countries have agreed to.

(Sourced from the Australian)