DUESSELDORF, Germany (Reuters) - German steel distributor Kloeckner & Co (>> Kloeckner & Co SE) increased planned job cuts to more than 2,000, the third time it has broadened the scope of its restructuring programme in less than a year.

The steel sector has been hit by a fall in demand for cars, appliances and new buildings. In Europe, demand for steel has slumped by almost a third since 2007 and government austerity and tight credit conditions are expected to remain a drag.

Steel companies including ArcelorMittal (>> ARCELORMITTAL), ThyssenKrupp (>> ThyssenKrupp AG) and Kloeckner have responded to the downturn by announcing plans to sell assets or cut jobs.

Kloeckner said on Friday it now planned to cut more than 2,000 jobs, or 17 percent of the workforce, by the end of 2013 and shut 70 sites around the world to boost its annual operating earnings by 160 million euros ($206.4 million) from next year.

When it announced the restructuring programme in 2011, Kloeckner had planned to cut 700 jobs. It last said in November it would reduce its headcount by 1,800.

"The European steel industry is in a deep crisis that will certainly last a while longer," Chief Executive Gisbert Ruehl told investors at Kloeckner's annual general meeting on Friday.

Kloeckner's operating profit excluding restructuring costs slumped by 39 percent last year, and it warned this month it was increasingly unlikely to reach its 2013 profit target.

Ruehl said there were signs that some small and medium-sized competitors lacking access to capital markets were facing difficulties in obtaining financing.

Shares in Kloeckner were up 1.2 percent at 9.62 euros by 1107 GMT, outperforming Germany's MDAX index <.MDAXI>, which was 0.1 percent lower.

($1 = 0.7751 euros)

(Reporting by Anneli Palmen and Maria Sheahan; Editing by Erica Billingham)

Stocks treated in this article : ARCELORMITTAL, Kloeckner & Co SE, ThyssenKrupp AG