The rebound in the iron ore price continued on Friday, adding 2.5% following a 4.7% increase on Thursday.
According to Metal Bulletin, the spot price for benchmark 62% fines rose by a further $1.41 to $57.50 a tonne, extending the three day rally to $4.62, or 8.74%.
For the week the benchmark price put on 0.72%, extending its year to date gain to 32%.
Pointing to the likelihood of the rally extending into a fourth session, Chinese iron ore futures rallied again on Friday evening, adding 2.47% to 456 yuan.
At its current level, the May 2016 contract on the Dalian Commodities Exchange looks set to close at the highest level seen since October 2015 should the gain be maintained or extended today.
Speculation over both seaborne supply of iron ore and Chinese steel demand has seen the iron ore price rally significantly in recent weeks, leading to a substantial pickup in volumes traded in futures markets.
On Thursday last week Brazilian iron ore giant Vale warned that it could lose as much as 100 million tonnes of annual output in the southeastern state of Minas Gerais over the next three years due to pending environmental licenses.
In an email to Reuters, the miner stated that licenses for 88 projects were still being analyzed, and that if they were not approved it would halve Vale’s output in the state.
Production cuts could come as soon as the next few months, the company warned.
Whether this or other factors was behind the substantial rebound of recent days is as yet unclear.