Q3 sales 28,891 tonnes vs 36,383 tonnes yr ago

* Production up 46 pct to 53,785 tonnes

* Shares down 7.6 pct (Adds details)

Nov 15 (Reuters) - International Ferro Metals (IFM) (IFL.L: Quote) posted a 21 percent fall in third-quarter sales, hurt by seasonally weak demand in its key markets, but forecast a revival in demand for ferrochrome with global stainless steel production expected to rise in 2011.

The South African firm that produces ferrochrome FECRO-HC-RU FECRO-LC-RU -- used in stainless steel to prevent corrosion -- said global stainless steel production is expected to rise to 33 million tonnes from about 30.8 million tonnes expected in 2010.

Global stainless steel production rose more than 40 percent in the first half of 2010 on the back of strong restocking as the global economy slowly recovered after recession. [ID:nLDE68J0YH]

"The third quarter is traditionally a weak time of year for ferrochrome demand and this year was no exception. However, since the end of the quarter we have begun to see a strengthening of demand, particularly from China," Chief Executive David Kovarsky said.

For the third quarter, ferrochrome sales for the company fell 21 percent to 28,891 tonnes from the year-ago period. As of Oct. 31, inventories stood at 31,324 tonnes, down about 27 percent from Sept. 30.

Production rose 46 percent to 53,785 tonnes from last year.

Shares in IFM, which competes with larger companies such as Xstrata (XTA.L: Quote) and Merafe Resources (MRFJ.J: Quote), were down 7.6 percent at 30.5 pence at 0819 GMT on Monday on the London Stock Exchange.

• [Editor:editor]