* Output down 6.7 pct on yr, for 2nd consecutive decline
* A decline in car output affects output- industry body
TOKYO, Nov 19 Japan's crude steel output
registered its biggest annual fall in nine months in October, as
a decline in domestic car production and an increase in imports
of construction steel reduced demand.
Output fell 6.7 percent from a year earlier to 8.84 million
tonnes, the Japan Iron and Steel Federation said on Monday.
That was the biggest fall since January, when the yen's
surge to near record highs and devastating floods in Thailand
forced Japan's top two steelmakers, Nippon Steel and Sumitomo
Metal Corp and JFE Steel Corp, to cut exports.
October output, which is not seasonally adjusted, increased
0.4 percent from September.
"A fall in car output has affected crude steel output," said
an official at the industry body, who asked not to be identified
in line with the group's practice.
Japan's steel producers are hurting from a decline in demand
from domestic carmakers after the government ended incentives in
September for environmentally friendly cars.
Compounding the sector's troubles, political tension between
Japan and China that erupted in September after a row over
disputed islands triggered violent anti-Japanese protests across
China, has hurt sales of Japanese cars in China.
Demand for Honda, Toyota and Nissan cars slumped in China in
September as tempers flared, with South Korea's Hyundai Motor
and Germany's BMW picking up market share.
Toyota has said its China sales dropped 49 percent in September.
The yen's strength also prompted larger imports of cheaper
construction steel from Asian rivals such as South Korea's POSCO
and Baosteel of China, pressuring prices
and forcing Japanese makers to cut output, the industry official
(Reporting by Yuko Inoue; Editing by Clarence Fernandez)