* Gloomy factory data and stocks rout dent investor sentiment
* Steel prices edge up as more mills slash output
* Iron ore under pressure from tepid steel demand
SHANGHAI, Aug 21 (Reuters) - Chinese rebar futures rose slightly on Friday after dropping for five consecutive sessions as more mills cut output, but weak factory activity that added to worries of a deeper economic slowdown kept a lid on gains.
More Chinese steel mills in northern regions have been ordered to curtail production over the next few days as Beijing aims to ensure clean air during a commemoration of the 70th anniversary of the end of World War Two on Sept. 3.
China's factory activity shrank at its fastest pace in almost 6-1/2 years in August as domestic and export demand dwindled, adding to worries that the world's second-largest economy may be slowing sharply. ID:nL3N10S379
The most active January rebar contract on the Shanghai Futures Exchange SRBcv1 edged up 0.15 percent to 2,036 yuan ($318.37) a tonne by 0219 GMT, but prices were still heading for a weekly loss.
"Iron ore prices were weaker. The impact of weaker spot demand around Beijing appears to be taking its toll on prices. The recent recovery in steel rebar prices also appears to be running out of steam," ANZ said in a research note.
Beijing's surprise devaluation of the yuan last week and a collapse in the stock market sparked fears that the world's second-largest economy could be at risk of a hard landing.
For iron ore, the most traded January contract on the Dalian Commodity Exchange DCIOcv1 inched up 0.27 percent to 377 yuan a tonne. It was on track for the first weekly fall in four.
Iron ore for immediate delivery to Tianjin port .IO62-CNI=SI extended losses on Thursday, dropping 0.54 percent to $55.60 a tonne, its lowest since Aug. 4, according to the Steel Index. Rebar and iron ore prices at 0219 GMT
Contract
Last
Change Pct Change SHFE REBAR JAN6
2036
+3.00
+0.15 DALIAN IRON ORE DCE DCIO JAN6
377
+1.00
+0.27 THE STEEL INDEX 62 PCT INDEX
55.6
-0.30
-0.54 METAL BULLETIN INDEX
55.84
-0.57
-1.01
Dalian iron ore and Shanghai rebar in yuan/tonne Index in dollars/tonne, show close for the previous trading day ($1 = 6.3950 Chinese yuan renminbi)