* Dalian iron ore falls 3.5%, Singapore benchmark slips
* Spot 62% iron ore extends pullback from 6-week high
* Shanghai steel futures slump more than 2%
By Enrico Dela Cruz
MANILA, Sept 20 (Reuters) - China’s iron ore futures fell more than 3% in early trade on Friday and were headed for their biggest weekly drop since mid-August, dragged down by growing worries about demand prospects for the steelmaking raw material.
The most-traded iron ore on the Dalian Commodity Exchange , for January 2020 delivery, declined as much as 3.5% to a two-week low of 624.50 yuan ($88.01) a tonne.
Concerns about increasing weakness in the global steel market weighed on investors already fretting about demand for construction and manufacturing materials in China.
Three major U.S. steel producers reported bigger losses this week amid weaker prices, according to ANZ Research.
“While not directly related to the Chinese market, it appears to be impacting sentiment following some weak economic data” in China, ANZ said in a note.
China’s industrial production grew at the weakest pace in 17-1/2 years in August, a sign of increasing weakness in an economy hurt by a bruising trade war with the United States and soft domestic demand.
China’s economic growth risks slipping below the lower-end of Beijing’s 2019 target of 6% in the third quarter or over the next year, analysts warn.
The downbeat demand outlook for iron ore outweighed reports of continued stockpiling of the material by steel mills in China in anticipation of port closures ahead of and during the National Day holidays in early October.
On the Singapore Exchange, the front-month October iron ore contract fell as much as 0.6% to $88.07 a tonne in early trade.
Prices for spot cargoes of benchmark iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62 dropped for the third day to $94 a tonne on Thursday, according to data from SteelHome consultancy. It hit a six-week high of $98 on Monday.
* The gloomy sentiment also weighed on China’s futures contracts for steel products and other raw materials.
* The most-active construction steel rebar contract on the Shanghai Futures Exchange fell as much as 2.2% to 3,371 yuan a tonne.
* Hot-rolled coil, the steel used in cars and home appliances, dropped as much as 2.1% to 3,391 yuan a tonne.
* Dalian coking coal sank as much as 3.1% to 1,288 yuan a tonne, while coke slid up to 2.6% to 1,928 yuan.
$1 = 7.0959 yuan Reporting by Enrico Dela Cruz; Editing by Subhranshu Sahu