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UPDATE 1-Kobe Steel shares plunge as data fabrication concerns deepen

* Shares tumble 16 percent in flat market

* Data falsification concerns spread to iron powder products

* Kobe previously said aluminum and copper products affected (Adds share prices, reported real estate sale)

TOKYO, Oct 11 (Reuters) - Kobe Steel Ltd shares tumbled a further 16 percent on Wednesday after it admitted it may have fabricated data on iron powder products and media reported the possible sale of its real estate business.

The latest disclosure comes after Japan's No.3 steelmaker said on the weekend it had falsified data to show that its aluminum and copper products had met customer specifications, and suggests the problems could be widespread.

Japanese manufacturers were thrown into turmoil by the revelation, with implications for materials used in cars, aircraft and possibly a space rocket and defense equipment.

Shares in Kobe Steel were down 15.73 percent at 900 yen as of 0114 GMT on Wednesday, underperforming the broader market which was steady. They fell 22 percent the previous day.

A Kobe Steel spokesman confirmed a report on Wednesday in the Yomiuri newspaper saying the firm may have fabricated data on iron powder products used in components such as automotive gears. He said the company was investigating the issue.

The Nikkei business daily meanwhile reported that Kobe Steel intended to put its real estate business on the block in an effort to shore up already shaky finances now threatened by the data falsification scandal.

The Kobe Steel spokesman said he could not comment on that report.

Kobe's data fabrication problems are the latest in a series of industrial missteps undermining Japan's reputation for high-quality production.

(Reporting by Makiko Yamazaki, Hideyuki Sano and Yuka Obayashi; Editing by Stephen Coates)