SGX iron ore slumps closer to $100 on gloomy China outlook

July 14 (Reuters) - Iron ore futures fell on Thursday, with the benchmark price in Singapore slumping more than 5% closer to the $100 mark, as fears grew that demand for the steelmaking ingredient in China will remain depressed in the short term.

Iron ore's front-month August contract on the Singapore Exchange SZZFQ2 dropped 5.5% to $102.75 a tonne in afternoon trade, marking a new low for 2022.

"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 DCIOcv1ended daytime trade 2.6% lower at 695.50 yuan ($103.21) a tonne.

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

It's uncertain when these blast furnaces would be restarted, as the mills face more headwinds, amid COVID-19 curbs and bad weather.