Speculation before Christmas had it that RBS was buying for a "trading company". Sources earlier today were speculating the buyer was either Glencore, Noble or Trafigura.

One source close to RBS told BusinessDay the buyer is Noble. Strategically, this would make sense as the iron ore market is the last commodity that remains dominated by a handful of major producers – BHP, Rio and Vale – while the trading companies have little presence.

However, a spokesman representing Noble this afternoon denied the group was behind the buying.

There was also strong buying today in Fortescue $5.50 February call options, consistent with speculation of corporate interest in the iron ore producer, which is moving towards 150mtpa of production in coming years.

Eoin Treacy's view M&A activity in Australia's resources sector has been brisk over the last year, particularly in the coal mining sector. (Also see Comment of the Day on January 4th). It remains to be seen whether the Australian government is as quiescent with regard to iron-ore acquisitions as it appears to be with coal.

Fortescue Mining represents an attractive takeover candidate for a larger company seeking an entry to the tightly knit iron-ore sector. However Andrew Forest still has a 31.5% shareholding and Hunan Valin Iron & Steel, in which Arcelor Mittal has a significant interest, holds 15.05% The share pulled back rather sharply in the first three quarters of 2011 but stabilised above A$4 and broke out of its four-month base today. A sustained move below A$4.85 would be required to begin to question medium-term scope for additional upside.

The iron-ore sector generally exhibits a high degree of commonality. They have all found at least near-term support and are increasingly pushing back above their respective 200-day MAs which are turning upwards. BHP Billiton and Rio Tinto have rallied impressively over the last month and the upside can continue to be given the benefit of the doubt provided they hold more than half that advance on the next setback. VALE has lagged somewhat but looks more likely than not to sustain a breakout from its five-month base.

Cliffs Natural Resources, Ferrexpo, MMX Mineracao e Metalicos and Atlas Iron share similar chart patterns with BHP Billiton and Rio Tinto above. Anglo American holds 65% of the sector leader, Kumba Iron Ore. Privately held Fevamotinico SARL owns 51% of Ferreexpo. Brazil billionaire, Eike Batista, owns 33% of MMX Mineracao e Metalicos. Neither, US listed, Cliffs Natural Resources nor, Australian listed, Atlas Iron appears to have a majority shareholder that could act to block a takeover attempt.

Sesa Goa, India's largest iron-ore producer, is 46.2% owned by Vedanta which is in turn controlled by the Agarwal family. It has been a serial underperformer within the sector. From late December the share posted its largest rally since early 2010, broke the two-year downtrend and closed the oversold condition relative to the 200-day MA. It will need to find support above the December lows near R150 on the next pullback to suggest demand is returning to dominance beyond the short term.