* Q3 pretax loss 1.1 bln SEK vs 1.2 bln fcast loss
* Says pace of market recovery remain uncertain
* Sees "clearly better" Q4 earnings vs Q3
* Shares gain nearly 8 percent (Adds CEO comment, analyst quote, background)
By Nick Vinocur and Johan Ahlander
STOCKHOLM, Oct 30 (Reuters) - Swedish specialty steelmaker SSAB expects cost cuts and some restocking to improve its fourth-quarter performance, after weak demand and low prices kept it in the red in the third quarter.
SSAB said cost-cutting had already saved more than 500 million Swedish crowns ($71 million) since the start of the year and would yield annual savings of twice that starting in 2010.
Global demand for steel is showing signs of improving and the company said production and deliveries picked up in the United States during the third quarter.
"Operating earnings in the fourth quarter will clearly be better than what was reported for the third quarter," Chief Executive Olof Faxander said in a statement.
"Despite a certain degree of stabilisation, there is continued uncertainty regarding the pace of recovery," he added.
SSAB shares, up by 50 percent since the start of the year, were up a further 8 percent by 1057 GMT.
Analysts said the pace of recovery in U.S. volumes had surprised to the upside, driving the share price reaction.
"The rebound in volumes in the United States came a little faster than expected," said Vincent Lepine, an analyst with Exane BNP Paribas.
Faxander said that deliveries in the United States in the fourth quarter would be higher than in the preceding quarter, while plants would be running at full capacity.
STEEL HURTING
Steel prices have slumped more than 70 percent since their peak in mid-2008 as demand from key industries such as automotive and construction has evaporated.
But improving macroeconomic data and restocking by customers, coupled with government stimulus for the U.S. and European automotive industries, have helped to lift prices off their lows.
SSAB's Faxander said he could not offer any outlook for price trends, saying that visibility was even more limited than in normal times and volatility remained high.
The company posted a pretax loss of 1.1 billion Swedish crowns ($157.1 million), slightly better than expectations, but down from a profit of 2.7 billion a year ago. The forecast in a Reuters poll of 15 analysts was for a loss of 1.2 billion crowns.
Sales were down 48 percent to 6.9 billion crowns during the period due to an extended period of destocking, a process which Faxander said was now complete in Europe and North America.
Earlier this week, ArcelorMittal damped recovery hopes with a muted forecast for the final quarter, even though it returned to profit in July-September.
($1=7.046 Swedish Crown)
(Reporting by Nick Vinocur and Johan Ahlander, editing by Will Waterman and Rupert Winchester) ((Stockholm Newsroom, tel: +46-8-700 1017, e-mail: stockholm.newsroom@thomsonreuters.com)) ($1=7.002 Swedish Crown)