After a three day break, Chinese traders make the most of soft iron ore prices to replenish inventories that remain more than 20% lower than a year ago.

The benchmark CFR import price of 62% iron ore fines at China's Tianjin port added 1% to $112 on Thursday, recovering from a sharp sell-off last week.

Stocks of the steelmaking raw material at China's biggest ports rose in April to over 70 million, but are still well below 90 million – 100 million average recorded during the first half of last year.

Analysts at investment bank Macquarie estimates that inventories in China which consumes some two-thirds of the 1.1 billion tonne seaborne iron ore trade are down to 21 days of supply from 30 days a year ago.

Stocks levels will bottom out between last year’s low of a 17-day supply and a "critically low" 14 days over the coming weeks, analysts Jeff Largey, Alon Olsha and Daniel Lurch said according to Bloomberg.

The end of destocking should help iron ore back above $120 a tonne in the second half of the year according to the research. Other indicators point to a more bearish outlook for iron ore however.

On Thursday Shanghai rebar, the most actively traded steel futures contract worldwide, dropped close to its 2013 low at 3,386 yuan ($552) and within shouting distance of the all-time record low of $550 hit 6 September last year. Record low steel prices in China then coincided with three-and-half year lows for iron ore of $86.70.

Chinese prices are the most closely watched – the country forges almost as much steel as the rest of the world combined – and is usually closely correlated with that of iron ore.