INTERVIEW-UPDATE 1-Italy non-ferrous sector to recover in 2010

* Output falls sharply in the first six months, demand weak * Hope of aluminium product demand pick-up in second half * Output to fall in 2009, demand recovery seen in 2010 (Adds detail) By Svetlana Kovalyova MILAN, July 17 (Reuters) - Output of copper and aluminium semi-finished products in Italy, a major European producer, is likely to start a gradual recovery next year after falling in 2009 hit by economic crisis, a senior industry official said on Friday. Non-ferrous metal demand from key consumers, such as car making and construction industries as well as energy sector slumped in the past 10 months due to global economic downturn and hit hard Italian manufacturers of semi-finished products. "A recovery should start in 2010, it will be a gradual one, not a boom. But we have demand on stand-by and it should pick up," Claudio De Cani, director of Italy's non-ferrous metal association Assomet, told Reuters in a telephone interview. Output of copper and alloy semi-finished products fell 29 percent to 488,000 tonnes in the first six months of 2009, while aluminium product output plunged 36 percent to 330,000 tonnes, De Cani said. "We had a very dramatic first half this year. But it was on the cards because the crisis was expected to go through its worst stage in the first half of the year," De Cani said. However, the sector performed worse than expected and De Cani cut deeper his earlier estimates for aluminium semis which he had expected to fall 20-25 percent fall in the first six months of 2009 and 17 percent in the entire year. A glimmer of hope comes from a pick-up in orders for aluminium products for the July-September period, reducing output fall quarter-on-quarter, he said adding that "there is no visibility beyond September". Full-year aluminium semis output was likely to fall about 25 percent year-on-year in 2009, while copper and alloy semis output was seen falling more than 20 percent this year from 2008, he said. Italian non-ferrous metal product manufacturers have been hit by delays in payment for orders from public administrations, seen construction industry orders fall and have experienced problems with getting access to bank loans, De Cani said. Responding to weak demand, manufacturers had to slash the use of operating capacity to about 50 percent, extend summer holidays and send employees home temporarily under government-backed social protection schemes, De Cani said. None of the sector companies have closed down so far, but if the situation did not improve in the coming months, some of them would be forced out of business, he added. (Editing by Keiron Henderson)