Iron ore prices continued their 13-day winning streak Friday, in what seems to be a rosy picture again for producers, encouraged by strong demand from top buyer China.

On Wednesday, iron ore prices reached $147.20 per tonne, its highest since Oct. 19, a result of Chinese steel mills' restocking of the commodity after the spot price crashed. The market demand softened in the past few months, sending prices of iron ore to fall below $117 per tonne in late October, marking a 22-month low.

With Chinese mills boosting ore stockpiles ahead of the end of 2011 and the Chinese New Year next year, we may be in the early stages of a restocking period, analyst James Wilson told Bloomberg.

A Chinese iron ore trader also explained most steel mills are now hurrying their iron ore purchases regardless of minimal inventory on concerns the market will see a likely new round of successive increases.

"The market is really strong right now. We have sold almost 100,000 tonnes in the spot market in the past two days alone. Now we have ready cargo of 40,000 tonnes and another 80,000 tonnes still in the sea," the trader told Bloomberg. He said his company only sold 20,000-30,000 tonnes last month.

Still, current prices remained a distant mile from where it started earlier in the year when it reached the $200 per tonne mark.

"The price of iron ore has softened in the last few months, however in the last week or so it has been good to see the spot price tracking upwards," Tony Kiernan, chairman of BC Iron, said in Proactive Investors.

"We will get the ups and downs of iron ore pricing in the next three to four years, but in general terms we would expect a healthy market for the sale of our product."

Steel prices in China are stabilizing and are encouraging steel producers to buy more iron ore, hinting steel manufacturing activity in the world's biggest consumer and producer is slowly recovering.

Higher prices are also being supported by fewer available iron ore cargoes in the market.

"It's a good place to be for the foreseeable future. If prices go up too high then you risk causing too much problems with the steelmakers because their margins get squeezed," Wilson said.