Iron ore held at its highest level in nearly four months as stocks of the steelmaking commodity at China's ports dropped for the eighth consecutive week, helping entrench a recovery in prices from this year's slump.
Iron ore has risen 37 percent from a 10-year low of $46.70 a tonne reached in April as falling port inventory reflected firm demand among Chinese mills replenishing low stockpiles.
Sucden Financial analyst Kash Kamal said the sustained decline in stocks of iron ore at China's ports "will offer support to spot prices in the coming weeks."
But traders said the pace of buying has slowed compared to recent weeks.
"The available choice of cargoes for some mills is still rather limited, but I don't think they're in a rush to buy now," said an iron ore trader in Shanghai.
Iron ore for immediate delivery to China's Tianjin port added 10 cents to $63.90 a ton on Tuesday, the highest since Feb. 16, according to The Steel Index (TSI).
Some traders at China's ports cut prices slightly "to stimulate sales," said TSI.
Inventory of imported iron ore at China's ports fell to 83.8 million tonnes as of June 5, according to consultancy SteelHome, which tracks the data. The port inventory, which has fallen 17.5 percent this year, is at its lowest since November 2013.
Among steel mills covered in a survey by Chinese consultancy Mysteel, the average inventory level of iron ore has dropped to 20 days of consumption from an average of 23 days in the first quarter, Goldman Sachs said in a report on Monday.
"Although the decline in inventory is relatively modest, the Chinese steel industry was operating with a lean supply chain that minimizes working capital, but that exposes steel mills to unexpected supply disruptions," Goldman Sachs said.
On Wednesday, the most-traded September iron ore contract on the Dalian Commodity Exchange was up 0.2 percent at 437 yuan ($70) a ton by the midday break. c