At the end of the latest offshore session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US69.70 a tonne, up 2.5 per cent from its previous close of $US68 a tonne, which was a five-year low.

Prices however remain 50 per cent below where they were at the start of the year and the commodity is still on track for a fourth straight week of falls after an October rally led it briefly back above $US81 a tonne.

The latest rebound came as key iron ore supplier Vale promoted expectations the iron ore price could return to an average range of $US85 to $US90 a tonne next year.

“There was a lot of volatility in prices this year and the market is undershooting at the moment and this will bring about a correction,” Vale boss Murilo Ferreira said, according to Bloomberg.

“This correction will come through the closure of many inefficient miners of high cost and poor quality iron ore.”

Despite the overnight gains BHP Billiton lost 2.4 per cent in London trade overnight, hurt by its exposure to oil markets as crude tumbled to a new four-year low.

Rival Rio Tinto fared better, with its UK-listed stock adding 0.3 per cent.