Reuter reported that prices of iron ore forward swaps rose recently as investors bet on a recovery in spot rates with Chinese steel mills likely to replenish stockpiles when they return next week after the Lunar New Year break.

A Singapore based iron ore swaps broker said the Singapore Exchange-cleared February swap contract is running at USD 146 a tonne in early deals. That is at a steep premium to the current spot rate of around USD 140.

He said that "The market's pricing in a restocking boom."

The February contract rose USD 1.12 to USD 144.81 on Wednesday, with March also up by the same amount to USD 143.75. Volume cleared by SGX which clears the bulk of global swaps jumped to 168 lots from 48 lots on Tuesday.

Miners may also be anticipating a recovery in Chinese demand.

Two big vessels each possibly carrying around 350,000 tonnes of iron ore from top iron ore exporter Vale are heading for the Philippines next month as the Brazilian miner looks to use the Southeast Asian country as an alternative base to reach Chinese ports.

The physical market remained dull with China away all this week for the Lunar New Year holiday.

(Sourced from Reuters)