Iron ore prices could continue to trade above $130/dry mt CFR North China in the first quarter of 2014, after higher-than-expected steel production in China supported them last year, Macquarie analysts said Thursday.

"We believe Q1 2014 will continue to see iron ore trade at more than $130/dmt," the Australian investment bank said in a note, referring to benchmark 62%-Fe grade imported into China.

"Helped by higher-than-expected Chinese steel output, iron ore gained 4% on an annual average basis, while ongoing ex-China weakness and double-digit supply growth saw met coal challenge silver for the wooden spoon (-22%)," the note added.

Platts assessed 62%-Fe iron ore fines at above $130/dmt for most of Q4 2013, with the market supported by demand for higher grades of imported ores. This was due to China's surging steel output and accompanying demands to curb pollution.

Platts assessed the 62%-Fe Iron Ore Index at $134.50/dmt CFR North China Tuesday, close to a two-week high

Platts assessed spot premium low-volatile hard coking coal at $131.50/mt FOB Australia Tuesday, compared with $160/mt a year ago.

China's crude steel output reached 782 million mt in 2013, up about 8% year on year, while output in 2014 is expected to hit 800 million mt, a China Iron & Steel Association executive told a Shanghai conference on December 21.

The industry body had initially guided for moderate crude steel output growth in 2013, but high monthly production rates persisted later into 2013 than expected by market participants and analysts.