Iron ore prices have risen by almost two-fifths since May due to a surge in Chinese steel production despite a sharp downturn in China’s real estate sector, contrary to investor expectations. Iron ore has experienced up to 38 per cent price growth over the past seven months and was $US137 last week.

The upward trend, which has intensified since August, was being considered by analysts as Chinese officials told steel producers that annual production ceilings would not be applied this year to support the country’s economic growth. China’s steel industry is in uptrend from that time, And production in the second half of this year is on a path to be the second-highest production record in history since 2020, according to Goldman Sachs.

The increase in production has lowered the price of steel but increased demand for iron ore and its price has risen. The country imported 1.1 billion tonnes of iron ore this year, mainly from Australia and Brazil, a 6% increase over the first 11 months of 2022.