Since falling to $53 in May, iron ore prices have climbed by more than 40 per cent. On Monday, Benchmark Australian ore with 62 per cent iron content was up 3 per cent at $76.10 a tonne, according to the Steel Index.

Many Chinese mills, such as those in northern provinces asked by the government to lower output in an effort to cut emissions, are investing in larger and less polluting blast furnaces that allow them to run at full capacity. To take advantage of such technology and achieve their production goals, operators are demanding larger amounts of higher grades ores with iron content of 62 per cent and above.

The new development has been well received by big suppliers such as Vale (BZ:VALE5), BHP Billiton (ASX, NYSE:BHP) and Rio Tinto (ASX, LON:RIO), particularly as the latter expects shipments from Down Under to reach 330 million tonnes this year.

On Monday, Rio's shares rose 2.2 per cent in Sydney, while BHP’s were up 2.5 per cent.