Japan steelmakers to beat '08/09 forecasts -Nikkei

TOKYO, July 20 (Reuters) - Japan's major steelmakers are likely to beat their own earnings forecasts for this business year thanks to price hikes to battle soaring fuel and raw materials costs, the Nikkei business daily said on Sunday.

Including export-bound products, the average price hike for this business year ending March 2009 appears to be several thousand yen more than what steelmakers forecast in April, the Nikkei said.

Steelmakers have to spend over 30,000 yen ($280.5) more on fuel and raw materials this year to manufacture 1 tonne of steel products, which translates to an increase of over 3 trillion yen for the whole industry, the paper said.

Nippon Steel Corp (5401.T), the world's second-biggest steelmaker, is likely to post a group operating profit of about 400 billion yen ($3.7 billion) in 2008/09, down 27 percent from a year earlier, but better than the company's forecast of a 36 percent drop to 350 billion yen, the Nikkei said.

Kobe Steel Ltd (5406.T) will likely see its profit shrink 11 percent to around 180 billion yen, but the profit will still be about 10 billion yen more than the company's current estimate, the paper said.

No one at Nippon Steel or Kobe Steel could be reached for comments.

After announcing their full-year earnings forecasts in April, large steelmakers got automakers to agree to price hikes of about 28,000 yen per tonne, or slightly more than 30 percent, the paper said.

They also won or are close to winning agreements from shipbuilders and consumer electronics makers on price hikes of about 30,000 yen or around 40 percent, it said.

Despite strong demand from China and the Middle East, Asian steel mills, which depend heavily on imports of raw materials, face a tougher year as they were forced to agree to pay up to 96.5 percent more for Australian iron ore and 71 percent for Brazilian minerals. ($1=106.95 Yen) (Reporting by Aiko Hayashi; Editing by Anshuman Daga)