Don’t tell the doomsters in the media, but Chinese spot iron prices are up more than 8% (and more than 6% in the past three days) since the end of September, when they hit a five-year low of US$77.50 a tonne. The media sees nothing but pain and sorrow in the deliberate moves by BHP Billiton and Rio Tinto to continue expanding production from their huge Western Australian mines (while cutting costs) in the face of global oversupply and weak prices. It will all end in tears (and that’s the belief of WA Premier Colin Barnett, the man who has spent his state’s patrimony from the resources boom and lost WA’s AAA credit rating a year ago last month as a result).

If you listen the doomsayers, they reckon such is the madness of BHP, Rio and the state of the iron ore market that prices are going to be much cheaper. And so it looked in August and September when they kept falling, and up to last week, when the rate of fall eased, but prices didn’t move. Chinese steel mills, the biggest buyers, are supposedly burdened by high costs, high stockpiles of raw materials and unsold product, and things are definitely tough. But overnight Monday, the spot prices of steel and iron ore jumped by more than 4% as buyers for both suddenly appeared.

Yes, iron ore prices are volatile, but given the hand-wringing and forecasts of worse to come from sections of the media and the investment community, you’d think they would leap on the current stirrings, which really kicked off last Friday night with a jump of 1.7%. The spot price jumped almost 5% on Monday as a flood of cargoes of Australian ore were sold at well above US$83 as tonne, according to Reuters. That the price didn’t crumble under the rise in cargoes tells us that demand has firmed in a surprising fashion. Now that could disappear quickly; indeed prices eased a touch to US$83.82 a tonne overnight Tuesday for the standard Australian iron ore (62% iron) shipped to northern China.

On Monday, Chinese trade data showed a surge in iron ore shipments last month to the second-highest on record — up 13% to 84.69 million tonnes (the highest was the more than 86 million tonnes imported in holiday-disrupted January of this year). More importantly, imports soared by 27% from just over 67 million tonnes in September 2013. Now we all know the Chinese steel industry is doing it tough, but a 27% jump in the volume of iron ore imports year-on-year tells us despite high stockpiles and weak demand for steel from the sluggish property market, demand is still there. Some of the surge in September was probably due to cargoes being booked in September but arriving in Chinese ports over the National Day holiday in the first week of October.

Reports from Reuters and several iron ore industry websites suggest prices might steady around US$80 to US$85 a tonne for the next month or so (it’s a very short-term market, a point the doomsters don’t quite understand). Reuters also said in a report that market analysts reckon Australian and Brazilian iron ore will be in demand in the current quarter around the prices now being paid because of the high-quality product being sold.

Demand for Chinese steel is definitely weak, production has steadied, according to industry reports (we will get the latest September production data next week), but Monday’s trade data showed that the mills are doing what all big producers do in tough times: find other markets. In the case of the Chinese steel mills its exports and they have soared in the past year.

China’s September net exports of steel products reached 7.2 million tonnes, up 4.5% from the previous high in May. In absolute volume terms, steel exports reached 8.5 million tonnes, also a record, and up a huge 73% from September 2013. Steel exports for the first nine months of the year soared a massive 39% to 65.3 million tonnes. Now the doomsters would have us believe that this surge in exports is bad because it shows the weakness of domestic demand, which it does. But rather than cut capacity (which raises costs and adds to existing loses), the Chinese steel mills are emulating BHP and Rio (which are producing as much iron ore as they can) by making as much steel as possible and either shipping it to domestic buyers, export markets or stockpiles so they can keep costs low, cash flow coming in and minimise the losses. It would be of real concern if the steel mills were not doing this, because it could mean they were broke and unable to finance themselves.

And by the way, Chinese coal imports rose to more than 21 million tonnes in September from a two-year low of 18.66 million tonnes in August. The controversial import duties start today in China (the ones the Abbott government was not told about in advance). BHP is obviously not worried; it opened a US$2.4 billion export mine in Queensland on Monday. The new mine at Caval Ridge will produce more than 5 million tonnes a year of high-quality coking coal, much of which will be aimed at China, despite the 3% duty on that type of coal.