The S&P/ASX 200 index closed 0.6% higher than yesterday at 5454 points, with the basic materials sector edging 0.2% higher in a lacklustre performance.

Despite positive offshore leads and widespread buoyancy in commodity prices, the major mines set a subdued tone, with BHP Billiton up 0.4% to $A38.10 and Rio Tinto closing flat at $63.37.

Iron ore companies were trading largely lower as the commodity continued to hover around $US116 per tonne and analysts amplified speculation of more upcoming price weakness.

Bloomberg has reported iron ore prices are set to slump in the second half of the year as more steel companies in China go under.

“More steel mills are likely to go bankrupt this year,” Shanghai-based analyst Judy Zhu was quoted as saying today.

“We recommend that investors sell September, October, November and December 2014 contracts traded on the Singapore exchange because of the increased likelihood that prices will drop below $110 a tonne.”

Radar Iron was a standout in the sector with a 14.3% fall to A3c, while Fortescue Metals Group closed 1.1% lower at $5.33.

Other falls around the industry were recorded by uranium company Aura Energy (down 13.2% to 3.3c), diversified explorer Magnetic Resources (down 14.7% to 14.5c) and White Rock Minerals, which lost 32% to 1.7c with a quarterly update on activities at its Mt Carrington gold-silver project in New South Wales.

Thundelarra was also down 11.4% to 7.8c, while Alchemy Resources finished 10% down at 2.7c despite delivering high-grade drill results at its Seaborg gold project in Western Australia.

Bucking the trend were Vantage Goldfields (up 27.6% to 3.7c), Metallica Minerals (up 25% to 5c) and Sihayo Gold, which gained 23.8% to 2.6c.

Inca Minerals requested a trading halt today pending an announcement regarding a capital raising by April 22.