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Steel prices in China have sunk amid a disappointing pace of recovery in demand, posing challenges to the industry, according to the China Iron and Steel Association.

The group has urged producers to cut output to help ensure a stable cash flow.

Already, more than 30 steel mills have issued plans for maintenance as of Tuesday, according to industry consultancy and data provider Mysteel.

Benchmark 62% Fe fines imported into Northern China rose 2.74%, to $106.32 per tonne.

In contrast, the steelmaking ingredient’s most-traded September contract on China’s Dalian Commodity Exchange ended daytime trade 0.4% lower at 716.50 yuan ($103.52) a tonne.

Even if the Chinese appetite for steel products improves later this year, iron ore will remain weak “for a long time” because of the government’s policy to curb output, Huatai Futures analysts said in a note.

China is considering limiting its steel output this year, according to analysts and recent unconfirmed reports, extending a two-year-old policy aimed at curbing emissions by the world’s largest steel producer.