In recent months, we’ve noted the surprising strength of Australia’s iron ore exports to China during what historically has been a seasonally weak time of the year. This pocket of strength was particularly noteworthy given the country’s struggling economy, as the resource boom wanes amid falling commodity prices.

Over the past year, the Reserve Bank of Australia’s Index of Commodity Prices, which tracks the prices of base metals, bulk commodities, energy products and rural commodities, has declined by 4 percent. The index achieved its all-time high in July 2011, while its most recent reading is 25.3 percent below its peak level and 4 percent below its five-year average.

Meanwhile, after suffering sharp corrections in September 2012 and June 2013, the prevailing price per metric ton of iron ore imported to China is near USD135, according to data aggregated by The Steel Index Ltd. That’s 15 percent below the trailing-year high of USD158.90 set back in February, but 55.7 percent higher than the four-year low of USD86.70 in September 2012.

While many of their peers in the mining industry are cutting back, Australia’s iron ore producers are still making prodigious investments in projects and operations, particularly in the country’s Pilbara desert.

The Chinese steel industry’s restocking of iron ore inventories has fueled much of the demand, with the Australian government’s estimate of total exports of iron ore for full-year 2013 rising to 650 million metric tons from 615 million metric tons just three months ago. Iron ore is Australia’s single biggest export, while China is the world’s leading consumer of iron, accounting for 60 percent of seaborne trade.

But the question is how long this restocking phase will last. After Australia’s persistent trade deficit fell as low as AUD271 million in September, it nearly doubled to AUD529 million in October, as China’s iron ore imports fell 9 percent from September’s record high.

Although China’s steel industry has been buoyed by government spending on major infrastructure projects, the country’s policymakers are hoping tough new environmental regulations will curtail the steel industry’s overcapacity and force inflated iron ore prices lower.

Meanwhile, policymakers are trying to transition the economy away from state-led spending projects, such as construction, toward consumer-driven growth, while also tightening credit to help remove excess leverage from the financial system. Finally, China’s economy is forecast to continue its deceleration, from an estimated 7.6 percent growth in gross domestic product (GDP) for full-year 2013 to 7.5 percent growth in GDP for 2014. As such, analysts believe growth in the steel industry’s production will fall by roughly half in 2014, from around 8 percent in the past year to roughly 4 percent this year.

For now, companies such as Fortescue Metals Group Ltd (ASX: FMG, OTC: FSUMF) are luxuriating amid record demand. In a recent interview with The Sydney Morning Herald, Fortescue CEO Nev Power said, “All this discussion about the end of the mining boom, we don’t see it … We sell all we mine.”

In early December, Fortescue set a new record for the single biggest shipment of iron ore, just shy of 264,000 metric tons, equivalent to about AUD35 million, and bound for China. The company’s shares currently trade near their 52-week high, up nearly 100 percent since their low toward the end of June.