* Weak industrial profits underline slower growth
* Steel prices down 6 pct in April-June
* Australian, Brazlian cargo prices fall by $1/T
(Updates rebar price)
SHANGHAI, June 29 (Reuters) - Spot prices for iron ore cargoes to China fell on Friday as buying interest from steel mills remained tepid, with data showing a fall in industrial profits for a second straight month underlining slower domestic growth.
Steel demand in China, the world's largest producer and consumer, has been waning since early April as Europe's debt crisis and a property tightening campaign have slowed economic growth, dragging down steel prices by 6 percent over April to June.
China is expected to grow at the slowest pace in more than three years this quarter and industrial profits fell for a second straight month in May on slackening domestic and external demand.
"Traders sealed deals (to buy iron ore) but have found it difficult to sell on market as mills are not buying," said a Shenzhen-based iron ore trader.
Prices for Australian and Brazilian cargoes to China fell by $1 per tonne on Friday, according to Beijing-based industry consultancy Umetal.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI dropped half a dollar to $134.90 per tonne on Thursday, the lowest since June 14, data from the Steel Index showed. It fell more than 8 percent over the April-June period.
Still, there are hopes Beijing will do more to boost the world's second-largest economy, which could lift steel and iron ore demand later in the year.
"Some traders are quite positive on the steel market in the second half of this year, and the market should not be as bad as the first half," the trader added.
However, any gains in iron ore and steel prices could be curbed by a supply glut in China, which has about 900 million tonnes of annual steel capacity but may only be able to absorb 700 million tonnes this year.
Steel output in China has jumped to more than 2 million tonnes on a daily basis since April, but has started to fall since late May. Daily steel output was estimated at 1.971 million tonnes from June 11 to 20, down 1.4 percent from the preceding 10 days, industry data showed.
The most active rebar contract for October delivery on the Shanghai Futures Exchange fell 0.42 percent to 4,068 yuan ($640) per tonne, after falling to a more than two-week low
of 4,040 yuan per tonne.
Shanghai rebar futures and iron ore indexes at 0722 GMT
Contract Last Change Pct Change
SHANGHAI REBAR* 4068 -17.00 -0.42
PLATTS 62 PCT INDEX 136.25 -0.50 -0.37
THE STEEL INDEX 62 PCT INDEX 134.9 -0.50 -0.37
METAL BULLETIN INDEX 136.04 -0.69 -0.50
#Index in dollars/tonne, show close for the previous trading day
($1 = 6.3575 Chinese yuan)