* Chinese rebar futures ease after hitting 2-month top
* Spot iron ore buying still slow
* Chinese inflation may moderate in H2-cbank official
SHANGHAI, May 4 (Reuters) - Shanghai rebar futures slipped 0.2 percent on Wednesday, after rising to two-month highs in the previous session, with a firm construction demand outlook in China capping losses.
The most active October rebar contract on the Shanghai Futures Exchange ended 12 yuan lower at 4,941 yuan ($761) a tonne, off an early low of 4,931 yuan.
"Demand is picking up," said Wang Dezhi, an analyst with Orient Securities Futures. "While the uptrend in raw material cost will be hard to reverse, steel prices will likely continue to rise this week."
There had been concern that steelmakers in China, the world's top producer, may curb output in view of power shortages that are likely to worsen during the summer.
But analysts say small Chinese steel mills are likely to take the brunt of the power shortages, the worst in years.
"The power shortage effect could be exaggerated at some point, and actually the output losses are just the tip of an iceberg," said Hu Yanping, analyst with Chinese consultancy Custeel.com.
China's average daily crude steel output has stayed at near record levels above 1.9 million tonnes since late February as steelmakers boosted output in anticipation of strong demand.
Hu expects China's daily crude steel output to stay around 1.9 million tonnes in May.
Global mining giant Vale , the world's biggest producer of iron ore, may have trippled for the first quarter, analysts estimated, as iron ore prices more than doubled.
Firmer steel prices bode well for iron ore, the key raw material. Offers for high-grade 63.5 percent Indian material remained at $188-$190 per tonne on Wednesday, Chinese consultancy Umetal.com said.
Traders said there was a deal struck for Indian 63.5 percent iron ore fines at $189 per tonne on Tuesday, but the majority of small Chinese mills remain concerned about the demand outlook on worries China's monetary tightening cycle may extend.
"Some steel mills are worried that steel prices and demand may fall at the end May and in June, and they don't want to take the risk of buying forward shipments, which arrive in about a month," said a trader in Beijing.
But comments by a central bank official published on Wednesday showed Chinese inflation will moderate in the second half of the year as government measures to curb price rises hit their mark.
Key iron ore indexes, based on spot Chinese deals and which global miners use in setting contract prices, rose on Tuesday.
Metal Bulletin's 62 percent index .IO62-CNO=MB gained 28 cents to $181.73 a tonne, the highest since April 12.
Forward swaps <0#SGXIOS:> also rose, with all contracts from May 2011 through December 2013 cleared by the Singapore Exchange gaining as much as over $6 a tonne, reflecting investor optimism spot prices will remain firm.
Baoshan Iron and Steel said on Tuesday China's crude steel capacity may rise by 40 million tonnes this year, which may bring the country's capacity to more than 800 million tonnes, despite Beijing's campaign to block capacity expansion, especially by small-scaled privately-owned steel mills.
Baoshan Iron and Steel is a unit of Baosteel Group, China's second-biggest steelmaker in terms of output.
($1 = 6.497 Chinese yuan) (Reporting by Ruby Lian and Manolo Serapio Jr.; Editing by Ed Lane, sourced Thomson Reuters)