UPDATE 1-International Ferro Q1 output doubles sequentially

* Says remains cautious in near term * Q1 output 36,773 tonnes vs 18,437 tonnes last quarter * Shares up 5 pct (Adds details)

Nov 12 (Reuters) - South Africa's International Ferro Metals Ltd (IFL.L) said on Thursday its first-quarter production doubled from the previous quarter, helped by the start-up of its second furnace.

The company, however, said ferrochrome production fell 38 percent compared with the same period last year when both its furnaces were running at full capacity.

International Ferro Metals said it remained cautious in the near term due to low visibility in demand from developing countries, and uncertain outlook for the rand and electricity costs.

Ferrochrome sales fell to 36,383 tonnes from 41,916 tonnes in the June quarter.

The company said ferrochrome price increased to $1.03 per pound in the December quarter from $0.89 per pound in the preceding quarter.

International Ferro, which had net cash of 433 million rand ($58.4 million) at end-September, said total capital expenditure budgeted for the remainder of the financial year was 350 million rand.

"With the prospect of continued ferrochrome price increases through 2010, IFL is well placed to take full advantage of its strategic access to growth in stainless steel production," Chief Executive David Kovarsky said in a statement.

The company's shares were up 5 percent at 41.5 pence at 0900 GMT on the London Stock Exchange. ($1=7.41 rand) (Reporting by Tresa Sherin Morera in Bangalore; Editing by Vinu Pilakkott)