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    Decline in Chinese steel demand in the upstream market oversupply renewed worries

         Traders and analysts said the decline in Chinese steel demand, rose this month to iron ore in the trend of poured cold water, iron ore prices may fall in the rest of the year. In little more than two months time, the price of iron ore rose 40 percent from a decade low, because Chinese port stocks that the market supply tightened, and this market has been battered in abundant supply.
         But with the economic slowdown in China, the country's steel demand weakened, and a slowdown in construction activity during the summer months, demand for steel further setbacks, prompting mills to cut production. According to government and industry data, this year from January to May Chinese steel production fell by nearly 2 percent from a year earlier, reduce demand by 5%.
         There are indications that iron ore shipments began to rise again, which also weighed on prices. Earlier speculation shows that some miners and traders to tighten supply to boost prices.
          "We believe that the current high price of iron ore, rose trend may be a boomerang, because the necessary supply cuts unlikely, which leads the market in a state of excess supply," Julius Baer Group analyst CarstenMenke representation.
          Iron ore prices in early June after hitting $ 65.40 per ton, nearly five-month high this week, fell 6 percent after Shanghai rebar futures also fell to its lowest level since the contract was introduced in 2009.
           Shanghai rebar SRBcv1 accumulated so far this year tumbled 17%.
           Menke said that if China Construction (8.05, -0.76, -8.63%) weaker industry conditions, a further slowdown in the overall economy, in the worst case, iron ore could fall below $ 40.
           Citigroup said in a report this week, the week of data the main suppliers of iron ore in Australia showed iron ore exports in early June in good condition, should be significant growth in the coming months.
           "So we expect iron ore prices sharply reversed in the coming months will fall." Citi expects the average price of $ 51 per ton of iron ore this year, 2016 is expected to $ 40.
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