UPDATE 1-Chile steelmaker CAP 1st-half losses $34 mln

(Adds analyst comments, details on revenues and background)

SANTIAGO Aug 11 (Reuters) - Chilean steel and iron ore producer CAP CAP.SN posted losses of $34 million in the first half on Tuesday compared with record profits the previous year as the global financial crisis hit sales.

CAP posted a $160.1 million profit during the same period in 2009. The company's first-quarter profits this year tumbled 75 percent to $15.1 million.

"The deterioration of the results are due to the sharp drop in economic activity amid the financial crisis that started in the United States," the company said in a note to the local exchange regulator.

The company's income fell 41.4 percent to $595.2 million from the previous year due in great part to losses in production and processing of iron, the company said.

Still, shares of CAP recovered from steeper losses earlier in the day as the market expected worse financial results, closing down 0.22 percent to 13,450 pesos per share, according to preliminary closing data.

"It's operational (results) were not as bad as some expected," said Rodrigo Andaur, an analyst with FIT Research.

(Reporting by Chile newsroom; Editing by Richard Chang, Bernard Orr)