Iron ore price leaps back above $US55 a tonne

The iron ore price has surged back above $US55 a tonne as Chinese traders return from a week-long public holiday.

A mine worker watches as a haul truck is loaded at Rio Tinto Group's West Angelas iron ore mine in the Pilbara. (Photographer: Ian Waldie/Bloomberg)

The iron ore price has jumped back above budget estimates as traders return to their desks after a week-long public holiday in China.

Iron ore rose 2.6 per cent to $US55.80 a tonne overnight, according to The Steel Index, from $US54.40 in the previous session.

In London trade, BHP Billiton jumped 2.8 per cent, while Rio Tinto rose 2.1 per cent. The diversified miners also got a boost from a rise in the oil price after Russia backed global moves to limit output.

Iron ore had made only modest moves for much of last week, but had edged below the key $US55 a tonne threshold for the first time in three months as prices continue to ease back from levels above $US60 a tonne which were widely seen as unsustainable.

UBS is the latest investment bank to note iron ore’s surprisingly strong run in recent months, which has seen some analysts update their near-term forecasts.

“The September quarter is generally a strong quarter for bulk commodities in Australia, but following an above average quarter for rainfall, we believe there is risk to the downside in terms of production and sales for the quarter,” UBS said in a research note.

“Offsetting this is a lift in the Platts 62 per cent iron ore price over the quarter.”

UBS said major miners BHP Billiton and Rio Tinto shipped less ore than expected in the quarter, which the bank says offers potential for disappointment when the miners report quarterly production results. But Fortescue Metals Group shipped slightly more than UBS had tipped.