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UPDATE 1-Japan Oct steel output drops 1 pct yr/yr, but demand firm

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* Production decline came after technical glitches at some mills

* Local steel demand from automobiles, construction still strong


(Adds comments and background)

By Yuka Obayashi

TOKYO, Nov 20 (Reuters) - Japan's crude steel output fell 1 percent in October from a year earlier to 8.97 million tonnes, data showed on Monday, reflecting technical glitches at some mills even as demand from automobiles and the construction sector remained strong.

In non-seasonally-adjusted terms, steel output from the world's second biggest producer after China, rose 4 percent from September, the Japan Iron and Steel Federation said on Monday.

"Production declined from October 2016 when monthly output was the highest in the year, but steel demand for automobiles, construction and civil engineering remain fairly strong in Japan," said a researcher at the federation.

Output from blast furnaces using iron ore and coking coal slid 3.5 percent in October, marking the sixth straight month of decline. Production from electric arc furnaces using metal scrap rose 7.2 percent, up for a 13th month in a row.

The decline in overall output last month came after some mills temporarily halted facilities.

JFE Steel, Japan's second-biggest steelmaker controlled by JFE Holdings Inc , said in September that it would halt operation of a blast furnace at its East Japan Works due to technical trouble, trimming its annual output by about 300,000 tonnes. "The furnace has returned to full operation by early November," a JFE Steel spokesman said.

In October, the Ministry of Economy, Trade and Industry predicted Japan's crude steel output would rise 0.4 percent in October-December from a year ago to 26.51 million tonnes. (Reporting by Yuka Obayashi; Editing by Manolo Serapio Jr.)

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