UPDATE 2-JFE wants iron ore prices to fall to 07/08 levels

(Adds Nippon Steel president comment)

TOKYO, Jan 6 (Reuters) - JFE Steel Co wants prices of iron ore and coking coal for term supply in the 2009/10 business year to fall to at least 2007/08 levels due to a precipitous decline in steel demand, president Hajime Bada said on Tuesday.

"The 07/08 levels -- that's the minimum for us," Bada told reporters at a reception for the Japan Iron and Steel Federation.

Iron ore prices have nearly doubled and coking coal prices have tripled this business year amid tight supply, but demand for steel has fallen sharply since late last year as a global recession and tight credit strangle sale of cars, construction machinery and other steel-made products.

Iron ore and coking coal are major inputs used in steel-making.

JFE Steel, the world's third biggest steel maker and the core unit of JFE Holdings Inc (5411.T), late last year became the first Japanese player to shut a blast furnace, cutting output in the six months to March by a quarter from the preceding half year.

Bada said talks with miners such as BHP Billiton (BHP.AX) (BLT.L) and Vale (VALE5.SA) could be delayed this year as deepening economic woes have made forecasts for steel demand difficult.

"We are hoping prices will be set by May at the latest," he said.

Meanwhile, Shoji Muneoka, president of the world's No.2 Nippon Steel Corp (5401.T), said he expects Japan's steel market to hit bottom at the end of March and get on a recovery track by the middle of the 2009 calendar year.

"Carmakers and other clients are sharply reducing output at the moment as they aim to squeeze inventories before the new fiscal year starts in April," Muneoka told a group of reporters.

"We expect orders to recover after inventory adjustments are completed in March," he said. (Reporting by Yuko Inoue; Editing by Lincoln Feast)