Iron ore prices surged yesterday (May 11), breaking through the US$113 level to reach a 22-month high. The price of Australia's 62% Fe grade iron ore fines delivered to China rose by US$1.30, reaching US$113.60. This growth was due to resilient economic data in China, where both PPI and CPI climbed, indicating strengthening market demand.

Several factors fuel this upward trend. Baosteel has increased its prices, driving gains across steel futures and spot markets. Additionally, a third round of coke price hikes and rising molten iron production have pushed ore costs higher.

Although steel mill profits support current demand, market participants anticipate price fluctuations. Increasing supply from Australia and Brazil, combined with the approaching slow season for end-user consumption, may create resistance to further increases.