Iron ore rallies above $US116

The price of iron ore recovered overnight.

The price of iron ore has recovered overnight, rallying to within US10c of the price it was trading at before posting its sharpest one-day drop in four years just over a fortnight ago.

Benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US116.80 a tonne, a solid 3.9 per cent lift on the $US112.30 price in the previous session.

For the previous five sessions iron ore had traded in a tight range between $US110.50 and $US112.30 a tonne.

Earlier this month, the price of iron ore charted its largest one-day price fall in more than four years on persistent fears over China's economy, dropping to as low as $US104.70 a tonne after closing out the previous week at $US114.20 a tonne.

Some analysts have cut growth forecasts for China, and predicted iron ore prices will sink to around $US80 to $US90 per tonne over the next few years.

In the more immediate future, investors will likely look to US and Chinese manufacturing numbers over coming days ahead of the closely watched monthly jobs data release in the US at the end of the week.

Last week, Fortescue Metals' Andrew Forrest said his company would continue exploring for iron ore in the Pilbara despite lower growth forecasts for China and weaker iron ore prices.

"Despite the market going up or down in iron ore prices that's not really my concern," the Fortescue chairman told reporters during a tour of the newly commissioned Kings mine.

"My concern is keeping those strong operating margins by becoming more and more competitive -- and that's happening."