SGX iron ore hovers near 2022 low on bleak China demand outlook

July 14 (Reuters) - Singapore iron ore futures fell on Thursday, hovering near this year's weakest level on growing fears that demand for the steelmaking ingredient in China will remain depressed in the short term, while Dalian prices moved in a tight range.

Iron ore's front-month August contract on the Singapore Exchange SZZFQ2 dropped as much as 4.1% to $104.35 a tonne. It tumbled to this year's low at $104.10 on Tuesday, but rebounded by 3.6% on Wednesday.

"Iron ore prices remain vulnerable to downside risk in the short term," said Daniel Hynes, ANZ senior commodity strategist. "Weaker steel demand from the construction sector in China is a major headwind for the iron ore price."

On China's Dalian Commodity Exchange, the most-traded September iron ore contract DCIOcv1 was steady at 714 yuan a tonne, as of 0542 GMT, following a three-day selloff.

Several mills in China, the world's biggest steel producer, have idled their production facilities or put them under maintenance earlier than usual to soften the blow from weak steel demand and high inventories.