The iron ore price rally has $US200 a tonne in sight after the steelmaking commodity reset its decade-old record high, strongly supported by Chinese demand amid a global building boom funded by fiscal spending aimed at infrastructure.

The industry benchmark S&P Global Platts Iron Ore Index advanced 1.3 per cent to $US193.85 ($250) a tonne on Tuesday, eclipsing the previous record of $US193 a tonne dating back to the last commodities supercycle on February 15, 2011.