UPDATE 1-Baosteel keeps prices steady for 2nd month, surprises market

* Rival Wuhan Steel raises prices for November

* China steel demand has not rebounded substantially -analyst

By Ruby Lian and Fayen Wong

SHANGHAI, Oct 10 (Reuters) - Baoshan Iron and Steel , China's largest listed steelmaker, will keep prices of its main products unchanged for a second straight month in November, surprising the market that was expecting a hike given recent gains in spot prices.

Shanghai rebar futures surged to a two-month top, recovering almost 15 percent from a record low hit in early September, on hopes demand would pick up as China gradually boosts liquidity to aid a slowing economy.

Spot steel prices in China, the world's largest steel-producing country, have similarly risen since last month on expectations of a recovery in demand.

"It was widely expected that the company would raise prices to catch up with gains in the spot market, but its move suggested it remained cautious over the near-term outlook," said Dai Xianghui, analyst with SDIC CGOC Futures in Beijing.

Shanghai-based Baosteel said on Wednesday that it would keep prices for major products including hot-rolled coil and cold-rolled coil unchanged.

Baosteel's pricing decisions usually set the benchmark for China's steel sector, although other steelmakers appear to be more bullish.

Another leading Chinese steel producer, Wuhan Iron & Steel , raised hot-rolled coil prices by 150 yuan ($24) per tonne and cold-rolled coil prices by 100 yuan per tonne for November, traders said.

Baosteel's current prices are still higher than current spot market prices, said Dai, which may be partly why the producer left prices steady.

Baosteel earlier closed a 3 million tonne-a-year plant in Shanghai due to big losses.

Other analysts say it might be too early for steelmakers to lift prices given still fragile end-user demand.

"Demand for flat steel products has only improved a little, and it will be too early for mills to raise prices," said Wang Chongyang, an analyst with Masterlink Securities Investment Advisory in Shanghai.

Baosteel and Wuhan Steel both produce mainly flat steel products including hot-rolled coil and cold-rolled coil for sectors such as appliance, carmaking and manufacturing.

Chinese steel producers including Wuhan Iron & Steel and Angang cut steel product prices for three consecutive months during July to September as an economic slowdown hurt demand.

($1 = 6.2878 Chinese yuan)

(Additional reporting by Manolo Serapio Jr. in SINGAPORE; Editing by Himani Sarkar)

((ruby.lian@thomsonreuters.com)(+86 21 6104 1797)(Reuters Messaging: ruby.lian.thomsonreuters.com@reuters.net))