However, traders and industry officials said spot iron ore trade remained lacklustre as many small and medium-sized mills were hardly breaking even.
Some were also sceptical if big mills would actually implement production cuts that were recommended by members of the China Iron & Steel Association for rescuing flat product prices.
"Steel prices look stable, but most people feel the market is not good enough to sustain these levels," said an iron ore trader at an international house based in Beijing.
"Nothing has changed about the oversupply in billets, rebar or hot-rolled wares. Some small blast furnaces had shut down or cut down for 10 days to two weeks. Yet they are now restarting again," the trader added.
Referring to the recommendations by the association, discussed with 48 major mills about two weeks ago, an industry official said: "I think it is difficult to realise. There has been no formal voice from the government."
Macquarie Research also said it was unlikely to do anything more than provide a short-term boost to market sentiment.
"Smaller mills show no inclination to cut output, particularly as many are only beginning to ramp up production at new facilities," it said in its China Commodities Weekly. INDIAN ORE
Traders said Indian iron ore was being offered little changed at $68-$70 a tonne delivered to China, with few buyers willing to pay that price, while suppliers were reluctant to trim the prices due to high internal transport costs.
Indian spot prices were almost at par with term cargoes from Brazil as freight stood at more than $30 a tonne, and were still above Australian term cargoes which were calculated at about $50-$55 a tonne, delivered to China.
The Beijing iron ore trader said Chinese imports from India, the number two supplier for China, might slump by as much as a third in November from 5.72 million tonnes in September.
With 2006 negotiations with the world's miners set to start in earnest late this month, the traders said Chinese steel mills were making all efforts to limit Indian prices, which surged last year to support a 71.5 percent price hike this year. Some steel mills were speeding up shipments from Brazil and Australia, while reducing purchases from India.
"Maybe that's why the big three are so bullish," another iron ore trader said, referring to the miners, such as Brazil's Cia Vale do Rio Doce pushing for 2006 price rises as much as 20 percent.
Chinese steel mills looked determined to prevent further price increases next year. Chinese port stocks of iron ore stood more than 35 million tonnes at the end of last week.