Iron ore swaps posted gains as trading kickstarted for the year with global financial markets supported by the 11th-hour deal overnight in Washington averting "the fiscal cliff" while China's extended holiday left physical trade quiet.

Liquidity through interdealer brokers was healthy around the front months and time spreads, with gains of $2-3 from Monday indicated. Prices shot up to the highest in eight months after physical traders said they would pay more on cargoes due to China's steel sector still showing healthy ore restocking demand.

February swaps, based on The Steel Index's 62%-Fe CFR Tianjin Index, traded at $142-143.25/dry mt, with offers slipping a touch by the close in Singapore. March was in a $141-141.25/dmt range and a strip for February and March saw multiple trades in a $141-142/dmt range. January swaps traded as high as $146/dmt.

The Q2 2013 contract traded at $137/dmt, up by around $3 on where it was pegged on Monday. The Q1 still had ample volume, with a $142.25/dmt, $142.50/dmt and $142.75/dmt reported by multiple traders.

The Q1/Q2 spread blew out to $7, from around $4 before the Christmas holiday break, as recent gains in the front of the curve boosted backwardation with swaps further in the future.

The Cal-14 was pegged at around $116/dmt, while Cal-13 was said to be around $133/dmt based on one trade talked about in the market.

February swaps, basis Platts IODEX, were assessed Wednesday at $144.25/dmt, up $2.75 on Monday. The IODEX Q2, 2013 was assessed at $138.50/dmt, $4.25 higher. The IODEX Q3, 2013 added $1.75 to $131.50/dmt. The IODEX Cal-14 was assessed at $117.50/dmt.

The Platts IODEX 62% Fe index on Wednesday rose $2 to $146.50/dmt CFR North China, compared with Monday's assessment. That was the highest since May 3, 2012.

The TSI 62%-Fe CFR Tianjin index was unchanged at $144.90/dmt.

Source: Platts