Iron ore set for weekly gain as falling China steel inventory lends support

July 22 (Reuters) - Iron ore futures rose on Friday, with the Dalian benchmark contract rebounding from a seven-month low and set for a weekly gain, as falling steel inventories in China spurred hopes for some replenishment-driven demand.

In Singapore, the steelmaking ingredient climbed back above the $100 mark and was also on track for a weekly gain, supported after Brazilian miner Vale SA VALE3.SA this week cut its 2022 iron ore production forecast.

The most-traded iron ore, for September delivery, on China's Dalian Commodity Exchange DCIOcv1 ended morning trade 2.2% up at 672 yuan ($99.30) a tonne, on track for a weekly gain of around 1%. Thurday's close at 657.50 yuan was its weakest since Dec. 29.

Iron ore's front-month August contract on the Singapore Exchange SZZFQ2 rose 3% to $100.80 a tonne.

Inventories of rebar, wire rod, hot-rolled coil, cold-rolled coil and medium plate held by the 184 Chinese steel mills regularly surveyed Mysteel consultancy declined at the faster pace of 6.8% on week to a near six-month low of 5.7 million tonnes over July 14-20.