* Americas, central/eastern Europe biggest losers in quarter
* China output falls by 1.2 percent
* Rest of Asia down 0.6 percent
* ISSF expects improvement in H2 2012
LONDON, June 14 (Reuters) - Global stainless steel production fell by 2.8 percent in the first quarter of the year, with an output reduction in all regions, according to a report from industry body ISSF, as producers battle overcapacity and sluggish demand.
The world's stainless steel output was 8.6 million tonnes in the first quarter of 2012, down from 8.8 in the same period last year, the report from the stainless steel producers' association showed.
ISSF - whose members include include all major stainless steel producers such as POSCO, ThyssenKrupp and Aperam - said however it did not expect the decline to continue for the remainder of 2012, forecasting a slight increase for 2012 as a whole.
"The current perception is that markets will be driven by real demand and some restocking will occur in the second half of the year," the association said in the report.
The biggest decrease was in the Americas, where stainless steel production fell 22 percent to 607,000 tonnes.
Production in top producer China and the rest of Asia also dipped, by 1.2 percent and 0.6 percent respectively to 3.433 million tonnes and 2.226 million.
Western Europe and Africa saw their output slip by 0.3 percent altogether to 2.21 million tonnes, while eastern and central Europe saw a 14.8 percent decline to 76,000 tonnes.