Iron ore is making a good price recovery, up nearly 12 per cent from the lows of March.
The spot price performance for 62 per cent fines at Tianjin Port in China leapt $US1.50 yesterday, 1.3 per cent to $US117.20 per tonne, which brought iron ore back over the mark it was at before the 8.3 per cent crash last month.
As a result, mining was the best performing sector yesterday, up 0.5 per cent overall.
Rio Tinto led the charge, with shares up 0.9 per cent to $64.50.
BHP Billiton climbed 0.4 per cent to $37.88, and Fortescue Metals charges ahead 2.4 per cent to $5.59.
Last week Vale CEO Murilo Ferreira told the Melbourne Mining Club that the iron ore price enjoys a strong floor around $110 per tonne.
"It's very clear for us that we have in average a floor in the range of $US110 per tonne… I believe the next one to two years will see this range," he said.
"In the last five years we have not seen a quarter of a price that is below $US110 including in 2012 when in September the price was $US87."
Last year iron ore averaged $135 per tonne, thanks to record breaking imports in China with mills restocking.
Iron ore continues to be highly exposed to the Chinese market, which accounts for 75 per cent of global usage, 62 per cent of global trade, and 48 per cent of global steel production.
Stockpiles of ore at Chinese ports are at record levels after an aggressive restocking program and fears the market will not be able to absorb a new wave of supply has some analysts predicting prices could fall even further.
The 8.3 per cent price drop on March 10 was blamed on skittish investors looking to repay loans, dumping iron ore onto the market.
The Chinese yuan has declined 2.5% in value this year, and this depreciation, engineered by the country's central bank, has not only raised tensions with the US, but increased the pain for steelmakers.