SHANGHAI — China’s iron ore import market gained momentum Thursday on stronger steel prices and tight supply.

Mainstream spot prices for Indian fines with 63.5-percent iron content rose to a range of $140 to $142 per tonne c.f.r. China, the highest level since late June.

"The physical steel market is showing more signs of strengthening," an iron ore trader in Shandong said. "The iron ore spot market is gaining traction with the rising (billet) prices."

"Recent incentive policies, including 21 projects approved by China’s National Development and Reform Commission on Dec. 24, local governments’ urbanization plans and the China Central Bank’s loose monetary policy, have boosted the market confidence," an industry analyst in Shanghai added.

Some market participants are now expecting spot prices of 62-percent fines to reach $145 to $150 per tonne c.f.r. in January.

"We think there will be more rises in iron ore prices next month, so we are holding off for better prices," a Shanghai trader said.

But the relatively sharp rise has also sparked some caution. "The risk is there, as steel producers are still in the red despite the rally of both steel and iron ore markets," another Shanghai trader said.

A version of this article was first published by AMM sister publication Steel First.