Reuters reported that spot iron ore prices rebounded after declining for two consecutive sessions as Chinese steelmakers ramped up production, boosting the appetite for the steelmaking raw material.

Daily steel output in China, the world's biggest producer bounced up 2.7% to an average 2.14 million tonnes between August 1 to 10th 2013 from July 21st to 31st 2013 and large mills lifted average daily running rates by 5.5% to 1.76 million tonnes.

An iron ore buying official with a large sized steelmaker in south China said that "We do not expect any rapid fall in iron ore price as China's demand stays strong, so we've stepped up purchases though we think USD 140 per tonne is too high."

According to the Steel Index, Benchmark iron ore prices with 62% grade.IO62-CNI=SI edged up nearly one percent to USD 139.2 per tonne. It hit a 5 month peak of USD 142.8 last week and has risen 7% this month.

Total steel output jumped 7% to 455.8 million tonnes in the first 7 months from a year ago and the economic planner expected full year production to rise 9 percent to hit a record 780 million tonnes.

Traders said that two cargoes of 62% Australian fines were sold at USD 138 and USD 140 per tonne respectively on Monday up from a tender of USD 137.95 last Friday.

Iron ore swaps cleared by the Singapore Exchange traded mixed across the board on Monday, with the mostly traded September contract inching up slightly to USD 134.92 per tonne. The most active rebar futures for January settlement on the Shanghai Futures Exchange eased back to CNY 3,796 by close down half a percent.