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PrintSpot iron ore prices edged up to near two-month highs but slow demand from top importer China and ample supplies stopped the benchmark rate reaching $140 a tonne, a level last seen in August.
Some Chinese steel mills were building up winter stockpiles of the raw material, although there was no aggressive buying because of lean demand for steel, traders said.
Benchmark 62 percent grade iron ore for immediate delivery to China .IO62-CNI=SI gained 0.2 percent to $137 a tonne on Monday, according to data publisher Steel Index.
That was near the two-month peak of $137.10 reached on Nov. 6, but prices have been trapped in a tight range between $131 and $138 since September.
"Chinese demand hasn't dropped, but it's flat and there has been plenty of available cargoes from the miners. It's really balanced for now," said a Shanghai-based iron ore trader.
The trading range has narrowed even further to between $135 and $137 over the past two weeks, and investment bank ANZ said it expected prices to ease in the near term due to soft Chinese steel demand and high inventories of iron ore at Chinese ports.
Port stockpiles of iron ore stood at nearly 84 million tonnes last week, according to industry consultancy Mysteel, and ANZ said that was the highest level since July 2012.
The most traded May rebar contract on the Shanghai Futures Exchange was little changed at 3,600 yuan ($591) a tonne by midday on Tuesday after falling to a three-week low of 3,583 yuan on Monday.
Iron ore for May delivery on the Dalian Commodity Exchange gained 0.7 percent to 936 yuan a tonne after touching a two-week low of 925 yuan on Monday.
Global miners such as Rio Tinto and BHP Billiton have been expanding output and trying to ship more iron ore to China even as Chinese demand has slowed from the double-digit pace of recent years along with economic growth.
That has put pressure on prices which have fallen 14 percent from this year's peak. Citi said it expected spot iron ore to fall to $95 a tonne by the third quarter of 2015.
"We expect the iron ore market surplus to expand in 2014, driven by a very large increase in supply from Australia, combined by sizeable increases in exports from Brazil and India
as well," Citi said in a report.
"This surplus is forecast to persist in 2015 and 2016, driven by continued large supply increases out of Australia and Brazil combined with slower steel production growth in China."
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