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Iron ore falls on rising China port stocks, steel demand outlook

* Dalian iron ore hits 3-week low, SGX iron ore dips 1.3%

* China iron ore port stocks hit new 7-mth high -SteelHome

* China September crude steel ouput up 10.9% y/y

MANILA, Oct 19 (Reuters) - Iron ore futures fell on Monday, with the Dalian benchmark hitting a three-week low, as China’s rising portside inventory and a bleak outlook for domestic steel demand during winter weighed on prices.

The most-traded iron ore contract for January 2021 delivery on China’s Dalian Commodity Exchange dropped as much as 1.7% to 770.50 yuan ($115.03) a tonne, its lowest level since Sept. 29.

Iron ore’s front-month November contract on the Singapore Exchange slid 1.3% to $113.50 a tonne.

Imported iron ore stocked at China's ports increased to a fresh seven-month high of 124.50 million tonnes last week, according to SteelHome consultancy. SH-TOT-IRONINV

Against the backdrop of rising stocks of the steelmaking raw material in China, domestic demand for steel products is set to weaken during the winter season, when construction activity in particular slows.

“(Steel) inventory is still high year-on-year, and as the weather gets colder, the speed of destocking in November and beyond is worrying,” analysts at Sinosteel Futures Co Ltd said in a note.

Clouding prospects for steel demand, China’s economic growth in the third quarter missed forecasts, pointing to persistent challenges for the world’s second-largest economy and top metals consumer.

Spot iron ore for delivery to China SH-CCN-IRNOR62 settled at $119.50 a tonne on Friday, a three-week low, SteelHome data showed.

FUNDAMENTALS

* China’s crude steel output in September rose 10.9% from a year earlier to 92.56 million tonnes.

* Brazil’s Vale SA is on track to reach its goal of producing 400 million tonnes of iron ore by the end of 2022 or early-2023.

* Construction steel rebar on the Shanghai Futures Exchange slipped 0.2%, while hot-rolled coil gained 0.2%.

* Stainless steel climbed 1.4% as raw material nickel prices rose.

* Dalian coking coal lost 0.7%, while coke was virtually flat. (Reporting by Enrico Dela Cruz; editing by Uttaresh.V)

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