Reuters reported that hopes are growing that China's economy will be in better shape in the H1 of 2013 after its new leader, who takes over in March, announced his commitment to pro growth policies, boding well for demand in the world's biggest steel consumer. 

Iron ore prices in the physical market turned higher this week after hitting 6 week lows as traders began picking up cargoes for delivery over the next 2 months on expectations demand from top buyer China will recover.

Rory MacDonald iron ore broker at Freight Investor Services said that "What we're looking at now in the physical market are cargoes to be delivered mid January to mid February. So you've got a few traders taking some position cargoes ahead of the Chinese New Year."

MacDonald said that "While sentiment on December delivery was bearish, we're now looking at Jan to Feb delivery so the sentiment's better. There's always an expectation that you'll get a bit of a price spike after the Chinese New Year, so there is the same anticipation this time around."