* Shanghai rebar closes down nearly 2 pct
* Traders remain concerned on China's economy
* Iron ore gains expected to be short-lived
(Updates Shanghai rebar price)
SHANGHAI, Aug 1 (Reuters) - Chinese steel futures fell nearly 2 percent on Wednesday, snapping six consecutive sessions of gains, as weaker-than-expected Chinese official manufacturing data dented market confidence and rekindled worries about sagging demand.
Steel prices in China, the world's top consumer, have been heading south since early April as cooling economic growth slashed demand from the construction and auto sectors, dragging rebar futures to a record low last Monday.
China's official factory purchasing managers' index inched down to 50.1 in July from 50.2 in June, suggesting the sector is barely growing, while a rival HSBC survey indicated the more market-sensitive private sector is starting to recover.
"The economy is really weak. Before we see any bigger recovery in the economy, the steel market will soon enter a weak demand season from late November," said an iron ore trader with a state-owned company's trading unit in Shanghai.
"We may only get a decent price increase in the second quarter next year."
Steel demand in China typically falls in late November to February as construction activities slow due to cold weather.
The most active rebar contract for January on the Shanghai Futures Exchange fell 1.8 percent to 3,703 yuan ($580) per tonne, within touching distance of a record low of 3,652
yuan hit on July 23.
Benchmark iron ore with 62 percent iron content .IO62-CNI=SI rose to $117 per tonne on Tuesday, ending its 14-session losing streak, according to the Steel Index.
A few Chinese steelmakers are buying iron ore at small volumes after prices of the steelmaking raw material slumped to their lowest in more than two and a half years, but tepid steel demand could rein in gains, traders said.
"End-user demand, whilst expected to pick up at the end of the quarter, does remain weak. The slowly falling steel output will also prevent any major rebound in iron ore prices in the short term," Metal Bulletin Iron Ore Index said in a note.
China's government has said it would step up measures to boost economic growth, including investments in key projects sectors including railways, utilities, finance and health.
But traders said they were waiting for details of those investments before taking any action amid expectations that the market will be weak until the second quarter of next year.
"Local governments want to boost economic growth, but they are short of cash for infrastructure investments, so steel demand will be curbed," said a steel trader in Shanghai.
Shanghai rebar futures and iron ore indexes at 0723 GMT
Contract Last Change Pct Change
SHANGHAI REBAR* 3703 -69.00 -1.83
PLATTS 62 PCT INDEX 117.5 0.00 0.00
THE STEEL INDEX 62 PCT INDEX 117 1.80 1.56
METAL BULLETIN INDEX 118.36 0.81 0.69
#Index in dollars/tonne, show close for the previous trading day
($1 = 6.3627 Chinese yuan)