* Shanghai rebar rises over 3 pct amid tighter supply
* Goldman lifts iron ore forecasts, sees continued volatility (Updates prices, adds BHP Samarco charge)
By Manolo Serapio Jr
MANILA, July 28 (Reuters) - Chinese iron ore futures rose almost 4 percent to the highest since April on Thursday, tracking big gains in steel prices, with sentiment also supported by a call from local miners to probe cheap imports which have hurt the domestic industry.
Iron ore traded on China's Dalian Commodity Exchange added to Wednesday's nearly 6 percent rally after more than 20 Chinese miners on Tuesday called for an anti-dumping investigation into imports of the steelmaking raw material from top suppliers Australia and Brazil. don't think it's going to happen, but if the government eventually restricts imported ore then the local iron ore price will definitely go up," said a Shanghai-based iron ore trader.
The most-traded September iron ore on the Dalian exchange DCIOcv1 climbed as much as 3.7 percent to 474.50 yuan ($71) a tonne, its strongest level since April 25. It closed up 3.3 percent at 472.50 yuan.
The gains also reflect the strength in steel prices which have been pushed up by tighter Chinese supply amid Beijing's continuing environmental crackdown that has led to the closure of some mills, traders say.
From July 11 to 22, the average daily crude steel output by 94 major steel mills in China fell 0.8 percent to 1.6897 million from the previous 10-day period, according to Argonaut Securities.
"Domestic steel market remains tight," the brokerage said in a note.
The most-active rebar, a construction steel product, on the Shanghai Futures Exchange SRBcv1 ended 3.1 percent higher at 2,480 yuan a tonne, after hitting a 1-1/2-week peak of 2,503 yuan earlier.
Buoyed by stronger futures, benchmark spot iron ore delivered to China's Tianjin port .IO62-CNI=SI rose 1 percent to $58 a tonne on Wednesday, a level last seen on July 14, according to The Steel Index.
Citing recent volatility in prices, Goldman Sachs (NYSE:GS) said it has lifted its three-month and six-month iron ore target price to $50 and $40 a tonne, from $45 and $35 a tonne, respectively.
"Overall, we expect iron ore prices to fall to $35/tonne over the next year and the ferrous space is likely to see continued volatility until steel inventories return to normal levels," Goldman said in a report.
The world's No. 3 iron ore producer, BHP Billiton BHP.AX BLT.L , said it will book a charge of up to $1.3 billion to cover the costs of a dam disaster last November at the Samarco iron ore mine in Brazil, putting it on course to report its worst ever annual loss. = 6.6603 Chinese yuan)