* Sept open interest jumps on Monday from 8-week low
* Late afternoon burst lifts steelmaking complex
* Shanghai rebar extends gains for a second day
* Base metals also stage late sessions gains (Updating with more details, recasts)
BEIJING, June 27 (Reuters) - Chinese iron ore prices surged 6 percent to one-month highs on Tuesday in a late burst of short covering and fresh buying that lifted steel and raw materials, with investors betting on rising demand even as a glut in the world's top metal market grows.
For one of its best daily performances this year, the most-traded iron ore contract on the Dalian Commodity Exchange DCIOcv1 ended the day up 5.92 percent at 456.5 yuan per tonne, after hitting 458 yuan in the last five minutes of trading.
Some investors took their cue from comments made by Chinese Premier Li Keqiang and industrial profit data that reassured them about the pace of growth in the world's second-largest economy, traders said. two factors were enough to get traders to cover short positions, said Marex Spectron in a note.
Others attributed it to the management of positions, known in the market as window dressing, ahead of the end of the quarter and the first half of the year.
The market is on track for its first quarterly loss since the fourth quarter of 2015 amid concerns about weakening demand as manufacturing slows in China, the world's top steel producer.
The sudden turnaround and more bullish tone offset lingering concerns about mountains of material sitting at ports. Last week, stockpiles SH-TOT-IRONINV rose to a 13-year high.
Open interest in the September contract, a measure of liquidity, jumped by 330,000 lots, equivalent to 33 million tonnes worth 15 billion yuan ($2.2 billion), after hitting eight-week lows on Monday. Open interest ended the day at 2.13 million lots.
Other markets followed with the most-active steel futures SRBcv1 up 3.5 percent to 3,224 yuan per tonne. Coking coal DJMcv1 jumped 2.19 percent to 1,049.5 yuan a tonne, and coke DCJcv1 was up 3.07 percent at 1,679 yuan per tonne.
Base metals also gained in a late session rally. MET/L
"High margins after the government's effort to eliminate low-grade steel are enticing mills to produce more steel, which increases the need for iron ore," said Zou Mingdong, Shanghai-based steel manager at Zhongcai Merchants Investment Group.
"However, the rising price doesn't change the fundamental situation of oversupply and weak demand."
The crackdown on low-end steel production has been in focus recently ahead of a June 30 deadline for mills to halt induction furnaces producing rebar used for construction purposes. low-quality steel furnaces is part of China's years-long effort to cut excess capacity and tackling pollution.
"Two decisive battles in the steel industry this year are thoroughly eliminating low-grade rebar and preventing (induction furnaces) from reopening," said Liu Zhenjiang, secretary general at China Iron and Steel Association, at an industry meeting last week in remarks published on Monday.