Immutability of Strings in Java

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Consider the following example.

String str = new String();

str  = "Hello";
System.out.println(str);  //Prints Hello

str = "Help!";
System.out.println(str);  //Prints Help!

Now, in Java, String objects are immutable. Then how come the object str can be assigned value “Help!”. Isn’t this contradicting the immutability of strings in Java? Can anybody please explain me the exact concept of immutability?

Edit:

Ok. I am now getting it, but just one follow-up question. What about the following code: 

String str = "Mississippi"; 
System.out.println(str); // prints Mississippi 

str = str.replace("i", "!"); 
System.out.println(str); // prints M!ss!ss!pp!

Does this mean that two objects are created again (“Mississippi” and “M!ss!ss!pp!”) and the reference str points to a different object after replace() method?

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