Iron ore has shot back above $US80 a tonne after successive daily gains boosted prices by over 5 per cent.

Concerns restocking in China may have peaked recently forced the commodity to a one-month low, but news of muted restarts from marginal producers have provided the base for the key Australian export to bounce higher.

Numbers from The Steel Index show iron ore jumped 3.2 per cent to $US80.10 a tonne in the most recent session, up from $US77.60 previously.

The news assisted the performance of BHP Billiton and Rio Tinto shares in UK trade, with surges of 4.4 and 5.1 per cent recorded, respectively.

The two-day rally has iron ore back within sight of the two-year peak of $US82.80 reached in December ahead of the quiet Lunar New Year period.

Lunar New Year falls on January 28 in 2017.

In a note on the commodity this week, Goldman Sachs said there was no reason to expect a near-term drop off in prices given marginal production has been slower to respond to the higher prices than many expected.

“Despite iron ore trading between $US70 and $US80 a tonne over the past month, we have not seen significant increases in Chinese domestic mine utilisation,” a note from the investment bank read.

“Our discussions with companies suggest the ramp up at domestic mines may not be significant before the Chinese New Year.

“Muted response from marginal miners in China lends support to near-term prices continuing to trade above costs, and is especially so if major miners experience seasonal shipment difficulties in Q1 2017.”

The commodity has more than doubled off 10-year lows around $US38 a tonne reached in February last year on a resurgent Chinese steel sector and speculative trading.

Analysts have long warned the extent of supply due to come on the market in the coming two years would weigh on prices, although the commodity continues to outshoot even the most lofty expectations.

This week, the Department of Industry, Innovation and Science revealed a 2017 iron ore forecast of $US51.60 a tonne, a sharp improvement on its prior outlook of $46.10 a tonne but a discount of a third on current prices.

Among the concerns are rising port stocks in China, which recently reached their highest level in two years, as well as the climbing supply from the world’s biggest producers.

“Some short-term support is expected at the start of 2017: increased profitability in the Chinese steel sector will combine with likely seasonal disruption to supply from Australia, where a more active cyclone season is forecast,” the department’s chief economist Mark Cully said.

“However, the forecast decline in the price will ultimately be driven by growing low-cost supply on the seaborne market and more subdued growth in global demand.”

For the first time the department also detailed its forecast for prices in 2018, tipping further weakness to levels around $US46.70 a tonne.