UPDATE 1-Indonesia Inco Q2 net slumps, plans cost cuts

* Q2 net profit down 89 percent to $17.405 million

* Q2 revenue down 65 percent to $154.964 million

* H1 net profit down 88 percent to $34.581 million

* H1 revenue down 66 percent to $276.359 million

JAKARTA, July 30 (Reuters) - PT International Nickel Indonesia (INCO.JK) on Thursday said it would improve efficiency after posting an 89 percent plunge in second-quarter net profit due to lower prices and weak demand in the economic slowdown.

President Director Arif Siregar said in a statement that Inco would continue its restructuring and cut maintenance costs in order to improve efficiency.

Inco -- in which Brazil's Vale Inco Ltd (VALE5.SA), one of the world's top nickel producers, has a 60.8 percent stake -- said earlier this week that it planned to cut 87 jobs, almost 3 percent of its workforce, as part of efforts to cut costs in response to the global crisis.

It had also revised down its capital expenditure budget for this year by more than a quarter.

Inco, which has a market capitalisation of $4.18 billion, said its average realised price slumped 60 percent to $8,894 per metric tonne in the second quarter, from $22,477 a year ago.

Nickel prices MNI3 were quoted at $16,825 a tonne on Thursday, up 44 percent from the end of 2008, but are still about two-thirds below a record high of $51,800 a tonne that was hit in May 2007.

The drop in prices reflects lower demand from stainless steel producers as construction and manufacturing slowed.

Inco produced 16,300 metric tonnes of nickel in matte in April-June, down 4.2 percent from 17,015 metric tonnes a year ago. (Reporting by Tyagita Silka; Editing by Sara Webb)