* Dalian iron ore down as much as 3.5%
* Spot prices for benchmark 62% Fe at $96.5 a tonne
* Demand can sustain but hard to grow - trader
BEIJING, Sept 19 (Reuters) - China's Dalian iron orefutures stumbled in early trade on Thursday, extending losses toa fourth session, on concerns about future demand.
The most-traded iron ore futures contract, on theDalian Commodity Exchange, for January 2020 delivery, slumped asmuch as 3.5% to 645 yuan ($90.93) per tonne, the biggestintraday decline since Sept.9.
Prices for spot cargoes of benchmark iron ore with 62% ironcontent for delivery to China, fell for asecond straight session on Wednesday to $96.5 a tonne.
There is caution as prospects of China's economy remainuncertain, a Shanghai-based trader said.Demand can be maintained at the current level but is unlikelyto grow further, said the trader, adding that supply of iron oreis relatively sufficient now.
The most-active construction steel rebar contract on theShanghai Futures Exchange, for January delivery,declined 1.5% to 3,461 yuan a tonne as of 0215GMT.
Hot-rolled coil steel, used in cars and homeappliances, on the Shanghai Futures Exchange, fell 1.7% to 3,467yuan per tonne.
FUNDAMENTALS
* Other steelmaking ingredients were mixed, with Daliancoking coal dropping 1% to 1,323 yuan a tonne, whilecoke edged up 0.2% to 1,989 yuan.
* China's local governments issued a net 2.0057 trillionyuan in special bonds in the first eight months of the year, thefinance ministry said on Wednesday, as Beijing looks to spurinfrastructure investment and stabilise the cooling economy.
* The U.S. Federal Reserve cut target interest rate by 25basis points to a range of 1.75-2.0% on Wednesday to helpsustain a record-long economic expansion but signalled a higherbar to further reductions.
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($1 = 7.0931 Chinese yuan)(Reporting by Min Zhang and Tom Daly; Editing by Aditya Soni)