WRAPUP 2-Steel firms see price pressures as China ups output

* Nippon Stl raises FY recurring forecast to Y20 bln

* New profit forecast above consensus of 13.5 bln yen

* Baosteel Q3 profit up 6.7 pct, cautious on Q4

* Sumitomo Metal, Kobe Steel post H1 losses

(Adds China's Baosteel results, comments)

By Yuko Inoue

TOKYO, Oct 29 (Reuters) - Nippon Steel Corp (5401.T) and China's Baosteel (600019.SS), the world's No.2 and No.3 steelmakers, warned of pressure on prices from China ramping up output, even as signs of improved demand bolstered their quarterly earnings.

Japan's Nippon Steel, which trails ArcelorMittal (ISPA.AS) and vies with Baosteel and fourth-ranked POSCO (005490.KS) in Asia, raised its full-year outlook on the strength of a government-backed boost in car sales and strong exports to China.

But production boosts by Chinese mills following Beijing's near-$600 billion stimulus package and rising steel inventories are worrying the company.

"Uncertainties have increased since October as inventories have swelled in China and they began affecting prices in South Korea," Shinichi Taniguchi, executive vice president at Nippon Steel, told a news conference.

"As South Korean mills are also building up capacity, we need to closely watch the demand and supply situation in Japan, China and South Korea."

Baosteel also voiced concern about the zeal to boost steel output in China, both the world's largest steel consumer and producer.

"The domestic steel market faces a worsening structural oversupply, while demand growth in downstream sectors is slowing," Baosteel said in a statement.

"New capacity is putting additional pressure on the market, steel inventories remain relatively high and steel mills have been steadily lowering shipment prices."

CONSUMPTION BOOST