* Rebar and iron ore give up early gains
* Steel tracks fall in equities market
* But steel demand expected to pick up seasonally (Updates close prices, recasts lede)
SHANGHAI, March 28 (Reuters) - Chinese steel futures erased early gains on Monday, tracking a broader fall in equities and commodities markets despite prospects of improving steel demand in the world's top market.
The most-traded rebar futures contract for October settlement on the Shanghai Futures Exchange SRBcv1 closed 0.5 percent lower at 2,132 yuan ($327.24) a tonne. It rose as much as 3.5 percent in morning trade, helped by expectations of a seasonal pick-up in demand.
A slide in property shares has wiped out initial optimism driven by encouraging industrial profit data released over the weekend, with the CSI300 index .CSI300 of the largest listed firms in Shanghai and Shenzhen down 0.9 percent. and other commodities are falling, and the impact of the harsh measures on controlling housing prices released by big cities has started to spread to commodities," said Xia Junyan, an analyst with Everbright Futures in Shanghai.
However, spot prices of rebar, a steel product primarily used in construction, rose up to 50 yuan a tonne to 2,350 yuan a tonne in Shanghai and jumped as well in other markets including Beijing on Monday, traders said.
China's industrial profits returned to growth in the first two months of 2016, with combined profits rising 4.8 percent from a year ago, despite weakening business conditions and slowing economic growth. iron ore futures for the September contract on the Dalian Commodity Exchange DCIOcv1 dropped 2.8 percent to 378.5 yuan a tonne by close, after surging 3 percent in early trade.
Spot iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI slumped 3.1 percent to $55.50 a tonne on Thursday, according to The Steel Index. The price was not published on Friday.
($1 = 6.5150 Chinese yuan)