Mar 1 (Reuters) - Spanish steelmaker Acerinox said on Thursday it expects steel demand to start recovering in the coming months after its net profit more than halved last year.

Net profit fell 58% to 228 million euros ($246.31 million) in 2023 after rising to record levels in 2021 and 2022 at a time when strong demand pushed prices higher.

A market adjustment that began in the second half of 2022 led to lower demand for stainless steel and lower prices, CEO Bernardo Velazquez told Reuters.

He said he expects an improvement as early as the second quarter of this year in the United States, but not before the third quarter in Europe.

Velazquez said the European economy still lags the U.S. economy, but lower interest rates are likely to make more money available and revive demand for appliances and cars.

The European Steel Association, Eurofer, said earlier this month that the steel market recovery forecast for 2024 will be slower than expected, as industrial production remains weak due to the bleak economic outlook.

Velazquez estimates that steel consumption in both Europe and the US fell by around one-fifth, while the alloys business, which accounted for 22% of Acerinox's revenue in 2023, remained positive.

To take advantage of the strength of the alloy market and the rapid recovery in the US, Acerinox announced this month the acquisition of alloy maker Haynes International for $798 million. The North American market already accounted for about half of Acerinox's sales.

Velazquez declined to give a profitability target for the year, but estimated that the company is losing 180,000 euros a day due to a strike that began three weeks ago at its Cadiz steel mill, which accounts for about a quarter of the company's output.

The company also said it will propose a dividend of €0.62 per share out of 2023 profits, up 3% from the dividend paid on the previous year's earnings.

(US$1 = €0.9257)

(Reporting by Matteo Allievi and Natalia Siniawski; edited in Spanish by Benjamín Mejías Valencia)