* Dalian iron ore up as much as 1.5% in morning trade
* Shanghai rebar, HRC edge down
* China steel inventories fall to over 9-mth low - Mysteel
BEIJING, Oct 25 (Reuters) - Shanghai steel futures inched down in morning trade on Friday even as inventory fell to the lowest since January, as sentiment remained negative due to a slowing economy and sluggish demand.
The most-active construction steel rebar contract on the Shanghai Futures Exchange, for January 2020 delivery, dipped 0.03% to 3,303 yuan a tonne as of 0229 GMT.
Futures for Shanghai hot-rolled coil steel, used in cars and home appliances, edged down 0.2% to 3,325 yuan.
Steel product inventories in China notched up a third weekly decline in the week to Oct. 25, down 600,000 tonnes from the previous week at 9.85 million tonnes, marking the lowest level since mid-January, according to data compiled by Mysteel consultancy.
The most traded Dalian iron ore futures contract, for January delivery, drifted up 0.5% to 625 yuan a tonne, after Brazilian miner Vale SA released lower-than-expected quarterly earnings as the iron ore exporter tries to overhaul its operations after a deadly dam collapse.
The miner also said it expected to recover 50 million tonnes in iron ore capacity in 2020-2021.
* Shanghai stainless steel future dropped 1.0% to 14,895 yuan a tonne.
* Other steelmaking materials were mixed, with Dalian coking coal up 0.1% at 1,255 yuan a tonne while Dalian coke fell 0.3% to 1,767 yuan.
* Benchmark spot 62% iron ore cargoes were unchanged at $86.5 a tonne on Thursday from a day earlier.
* A fire at a steel mill in China’s top steelmaking Hebei province, with annual capacity at 2 million tonnes, killed 7 people on Thursday.
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Reporting by Min Zhang and Tom Daly; Editing by Jacqueline Wong