* Dalian iron ore down as much as 3%
* Benchmark spot 62% iron ore fell to $82 a tonne
* Steel inventory hits near nine-month low (Adds details and quotes; updates closing prices)
BEIJING, Nov 11 (Reuters) - Iron ore futures in China closed at a two-and-a-half-month low on Monday, dropping for a fourth session, as demand declined amid a slowing manufacturing sector and as mills reduced their stockpiles.
The most-traded iron ore futures on the Dalian Commodity Exchange, for January 2020 delivery, closed down 2.4% at 592 yuan ($84.64) per tonne, the lowest since Aug.29. They had declined as much as 3.1% earlier in the session.
China posted its biggest decline in producer prices in more than three years in October, dragged down by cooling demand in the manufacturing sector and a knock from the Sino-U.S. trade friction.
The construction steel rebar on the Shanghai Futures Exchange, dropped 1.1% to 3,373 yuan a tonne.
Hot-rolled coil, used in cars and home appliances, for January delivery, slipped 1.0% to 3,321 yuan.
“The ferrous market is on the weakest front as steel mills are destocking for the end-of-year financial accounting,” said Darren Toh, data scientist with Singapore-based steel and iron data analytics company Tivlon Technologies.
Steel inventories in China stood at 8.9 million tonnes as of Nov.7, the lowest level since Jan.11, according to data compiled by MySteel consultancy.
* Shanghai stainless steel futures plunged 4.3% to 14,210 yuan.
* Other steelmaking ingredients fell, with Dalian coking coal, for January delivery, edging down 0.9% to 1,225 yuan a tonne and Dalian coke slumped 2.9% to 1,699 yuan a tonne.
* Benchmark spot 62% iron ore for delivery to China SH-CCN-IRNOR62 fell to $82 a tonne on Friday.
* China’s auto sales fell for a 16th consecutive month in October, declining 4% from the same month a year earlier, China Association of Automobile Manufacturers said on Monday.
* China’s Jingye Group said it is still in talks to buy British Steel after the BBC reported the company was set to buy the UK steelmaker for $90 million.
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$1 = 6.9941 Chinese yuan Reporting by Min Zhang and Shivani Singh; Editing by Shailesh Kuber and Aditya Soni