BEIJING, July 22 -- China's steel scrap prices have kept an upward trend since June, partially due to tight supplies.

The prices are forecast to rise by a further 50 yuan (about 7.35 U.S. dollars) per tonne to reach a high for the year, according to leading bulk commodity consultancy www.315i.com.

The consultancy also ruled out the possibility of steep price cuts in July.

The strong prices were buoyed by tight supplies and steady demand. On the one hand, sweltering and rainy weather disrupted processing and transportation of steel scrap and the country's slowing relocation efforts affected production of the material.

On the other hand, budget-conscious steel mills continued to purchase steel scrap, a key steel-making ingredient, due to its competitive prices, which resulted in stable market demand.

However, the consultancy also forecast that demand may fall slightly in the longer term as the government may limit steel production out of environmental concerns.