Price offers for spot iron ore cargoes in top consumer China fell on Friday after the benchmark rate sagged to its lowest in more than 2-1/2 years as weaker steel demand cut producers’ need for the raw material.

China’s iron ore imports fell for a second straight month in July as steel mills curbed output in the face of sluggish demand.

Imports dropped to 57.87 million tonnes last month from 58.31 million tonnes in June, preliminary customs data showed on Friday.

“I’m surprised that iron ore imports managed to stay relatively stable compared to June,” said Helen Lau, senior commodities analyst at UOB-Kay Hian in Hong Kong, who expects bigger declines in imports in August and September. “We’ve already seen production cuts among steel companies and even the larger ones have also scaled back output. There are no signs of improvement in steel demand, so probably steel mills will keep inventory of iron ore low.”

Shanghai steel rebar futures rose 0.8 percent to 3,721 yuan ($590) a tonne, in what traders said was a largely technical rebound after prices dropped for the past four weeks. Rebar climbed more than 1 percent this week.

With iron ore stockpiles at major Chinese ports still high at about 97 million tonnes, Lau said there is no strong incentive for mills to import more of the steelmaking ingredient.

SLOW SALES: Over the past 22 trading days, iron ore prices have only risen twice. The commodity is down 17 percent this year, and has slid more than 23 percent from the 2012 peak near $150 reached in April.

The upside for iron ore prices is limited, said Lau, given high inventories in China and the excess supply of steel in the country which remains saddled by overcapacity.

Traders have been struggling in the current market situation. “We have around 250,000 tonnes of stock at ports which we’ve had for a month now. We are trying to reduce our stock, but sales are quite slow. It takes maybe one whole day just to sell 1,000 tonnes,” said a Shanghai-based iron ore trader.

Still, major iron ore miners continue to sell spot cargoes. At current levels, iron ore prices are still about three times their production cost. Vale, the world’s top iron ore miner, is offering 177,000 tonnes of 64.51-percent grade Brazilian Carajas iron ore fines at a tender that is closing on Friday, traders said. The cargo could be the same that Vale offered to sell via the China Beijing International Mining Exchange platform on Thursday which failed to get any bidders, even after the miner reduced the price offer to $124.80 from $125.50, traders said.

Sellers of Australian iron ore to China cut price offers by $1 per tonne on Friday, according to Beijing-based industry consultancy Umetal.