Benchmark 62% iron ore at China's Tianjin port added 2.2% on Monday to $132.20 a tonne, the highest price since July 13 according to data from Steelindex and up 8.3% in December alone.

The price was boosted by news from China's National Bureau of Statistics that inventories of iron ore at the country's top 30 ports fell to 73.7 million tonnes – the lowest level in over two years and the 7th weekly decline in a row.

After hitting a peak above 100 million tonnes in February iron ore stockpiles remained steady until September.

Then with the price hitting a three-year low of $87.50 taking many domestic producers out of the market, China's steelmakers, suffering from a collapse in profitability, started delving into stocks.

Iron ore has now recovered more than 50% from its September lows, but is still off the average price for 2011 which was around $150 a tonne.

The steelmaking raw ingredient reached a peak of $191.90 in February 2011.