UPDATE 1-Nippon Steel mulling output cuts from Nov -source

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TOKYO, Oct 23 (Reuters) - Nippon Steel Corp (5401.T), the world's second-biggest steelmaker, is looking at cutting output for the first time in three years from November to cope with a slowdown in demand, a source with direct knowledge of the matter said.

The company, which is operating at full capacity at present, may start cutting output by a few percentage points and will continue making adjustments in accordance with developments in the market, the source said.

Nippon Steel President Shoji Muneoka said on Tuesday that Japanese steelmakers may soon cut output amid signs of weaker demand.

Steel orders placed by foreign and Japanese clients fell 5.4 percent in August, the first year-on-year decline in 28 months.

Muneoka said business sentiment had deteriorated in the past month as the U.S. financial crisis takes its toll on the economy. (Reporting by Yuko Inoue; Editing by Edwina Gibbs)