UPDATE 1-Intl Ferro Metals sees increase in demand

* Q4 output 18,437 tonnes vs 1,168 in Q3, 56,608 in Q4 2008

* Ferrochrome demand, spot prices risen in last 4 weeks

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LONDON, July 17 (Reuters) - International Ferro Metals Ltd (IFL.L) said ferrochrome demand and spot prices have increased noticeably over the four weeks to July 17 as a result of the Chinese stimulus programme and low ferrochrome inventories.

Production recovered from the third quarter, but slumped 67 percent from the year earlier as the company responded to lower demand from stainless steel makers.

Fourth-quarter output increased to 18,437 tonnes of ferrochrome, up from 1,168 tonnes in the third quarter, but down from 56,608 tonnes in the year-earlier period.

Ferrochrome sales jumped to 41,916 tonnes from 10,484 tonnes in the third quarter, but dropped from 89,091 tonnes in the year-earlier quarter.

It started a three-month programme in April to convert raw material inventory, comprising mainly chrome ore and coke, to finished ferrochrome product. It has reduced its inventories to 9,362 tonnes from 33,207 tonnes in the preceeding quarter.

It restarted one of its two furnaces that were suspended last November on April 20 and expects to make a decision on the other furnance soon. [ID:nWEA0084]

(Reporting by Julie Crust; editing by Simon Jessop)