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China rebar, iron ore extend losses on weak demand outlook

* Tepid economic outlook weigh on demand for steel, iron ore

* Big steelmakers reported $756 mln of losses in Jan-Feb

* Mills ask for discount to buy iron ore

SHANGHAI, April 15 (Reuters) - Chinese steel and iron ore

futures extended losses on Tuesday, weighed down by a tepid

pick-up in demand for the two commodities in the world's top

consumer.

Demand for metals traditionally improves in the second

quarter as construction and manufacturing activity firms, but a

sluggish recovery in China and the lack of any major economuc

stimulus by Beijing is expected to pressure commodity prices.

"The general market sentiment remains weak amid gloomy

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expectations for first-quarter economic growth, which keeps

denting steel demand and prices," said Xia Junyan, an analyst

with Wanda Futures in Shanghai.

"I don't expect any big improvement in steel prices in the

near future."

The most-traded rebar for October delivery on the Shanghai

Futures Exchange edged down 0.3 percent to 3,358 yuan a

tonne by the midday break. It earlier touched 3,336 yuan, its

lowest price in more than one week.

China's major steel companies lost 4.7 billion yuan ($755.74

million) in the first two months of the year, compared with a

profit of 5.1 billion yuan in the same period last year, local

media reported on Monday, citing data from the China Iron &

Steel Association.

Shrinking profit margins and falling steel prices are

forcing Chinese steelmakers, which produce about half of the

world's steel output, to curb purchases of iron ore.

"The market has been quiet since Monday afternoon, and

everyone is watching closely for the upcoming economic data in

order to find clues for the market trend," said an iron ore

trader in Beijing.

"Demand is still there, but steel mills are bargaining a lot

and offering very low prices for cargoes."

China's gross domestic product likely grew 7.3 percent in

the first quarter, the slowest pace in five years, according to

economists polled by Reuters, ahead of the data to be released

on Wednesday.

Iron ore for delivery in September on the Dalian Commodity

Exchange fell for a fourth day in a row, down 0.25

percent to 803 yuan a tonne by midday break.

Iron ore for immediate delivery to China

stood little changed at $117 a tonne on Monday, after falling

nearly 2 percent to $116.90 a tonne on Friday, according to data

compiler Steel Index.

Global miner Rio Tinto (Xetra: 855018 - news) said its

first-quarter iron ore shipments fell 8 percent from the

previous quarter due to weather-related disruptions in Australia

and Canada, but shipments were still up 16 percent from a year

ago.

Rio miner said it would still meet full-year production

target of 295 million tonnes to meet growing demand from China.

Shanghai rebar futures and iron ore indexes at 0433 GMT

Contract Last Change Pct Change

SHFE REBAR OCT4 3358 -11.00 -0.33

DALIAN IRON ORE DCE DCIO SEP4 803 -2.00 -0.25

THE STEEL INDEX 62 PCT INDEX 117 +0.10 +0.09

METAL BULLETIN INDEX 117.74 +0.37 +0.32

Dalian iron ore and Shanghai rebar in yuan/tonne

Index in dollars/tonne, show close for the previous trading day

($1 = 6.2191 Chinese Yuan)

(Reporting by Ruby Lian and Fayen Wong; Editing by Richard

Pullin)