* Shanghai rebar climbs as much as 1.2 pct
* Expectations of better steel demand from September (Adds comment on yuan devaluation, updates prices)
By Manolo Serapio Jr
MANILA, Aug 11 (Reuters) - Iron ore futures in China climbed to their highest in more than a month on Tuesday, pushed up by hopes that steel demand in the world's top consumer would pick up next month, but prices closed off session highs.
Shanghai rebar steel futures rose more than 1 percent to recover from a two-week low before paring gains. Chinese steel consumption has been slow so far this year but construction activity usually resumes in September after the summer lull.
"Steel demand in September and October is highly likely to be better than in August and prices may not drop significantly," said Wang Li, a consultant at CRU Group in Beijing.
Efforts by Beijing to increase investment in infrastructure may also be felt in the latter part of the third quarter, said Wang.
Iron ore for January delivery on the Dalian Commodity Exchange climbed as far as 383 yuan ($61) a tonne, its highest since July 6. It closed up 1.1 percent at 373 yuan.
China's surprise devaluation of the yuan could make it more costly to import dollar-denominated iron ore but Wang said overall Chinese demand for commodities would stay high, particularly for iron ore, given the massive size of the country's steel output.
The January rebar contract on the Shanghai Futures Exchange ended 0.2 percent higher at 2,053 yuan a tonne after rising as much as 1.2 percent.
Weak demand at home has fuelled a sharp rise in China's steel exports, with shipments of 9.73 million tonnes in July, up 21 percent from a year before and near the record high of 10.29 million tonnes posted in January.
"We currently forecast China's crude steel output to contract 2 percent this year as weaker domestic consumption offsets stronger steel export growth," Commonwealth Bank of Australia said in a note.
"If China's steel product export growth expands faster this year, we could see China's steel output lift, implying a stronger iron ore price."
Firmer futures bode well for the price of spot iron ore, which rose to a one-month high of $56.40 a tonne last week, recovering from July when it sank to its weakest in a decade.
Iron ore for immediate delivery to China's Tianjin port stood at $56.30 a tonne on Thursday, according to The Steel Index (TSI), which did not publish prices on Friday and Monday due to public holidays in Singapore.
($1 = 6.2986 Chinese yuan)