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TOKYO, June 8 (Reuters) Nippon Steel Corp. said on Thursday it aims to boost its export price by more than 10 percent next quarter in the wake of a strong market recovery in Asia, a sign that its profit this year could beat its forecast.

Nobuyoshi Fujiwara, chief financial officer at the world's third-biggest steel maker, also said the company will end production cuts at the end of this month, reflecting a slightly better-than-expected improvement in the domestic market and progress in inventory adjustments.

''Higher prices and an increase in output should prop up our profit. It's a positive factor,'' Fujiwara told Reuters in an interview.

Nippon Steel aims to raise the export price of hot coils to a level equal to that of European competitors in the three months to September, or $600 per tonne, Fujiwara said.

It will end production cuts at the end of this month after implementing a 150,000 tonne cut in sheet steel output this quarter, though he said it would cautiously watch the market before boosting production.

Nippon Steel expects pretax recurring profit before special items of 460 billion yen ($4.05 billion) for the business year to next March, down 16 percent, which reflects a huge appraisal profit on inventory values that raised one-off profit by 83 billion yen last year.

Kazuhiro Harada, an analyst at Deutsche Securities, said he expects Nippon Steel to make a profit of 500 billion yen this business year, assuming its export price stays at $550 per tonne.

That profit figure would be down 9 percent from 2005/06.

STABLE EARNINGS GROWTH Fujiwara said strong demand for Japanese cars worldwide would help Nippon Steel follow a stable earnings track in the next few years, shielding it from the industry's boom and bust cycle.

Its focus on high-quality automotive steel, a strategy of gradually raising output by modifying existing production lines, and sharing facilities with two allies would boost its profit, while limited sales volume of low-priced steel products would minimise the impact of market swings in East Asia, he said.

''We are now in a stable profit growth trajectory ... Our investment strategy of using our existing production facilities to boost output is extremely efficient.'' The company expects cost-cutting and a planned 1 million tonne increase in high-quality sheet steel output alone to boost its profit by 65 billion yen ($572.5 million) this business year.

Concerns that Japanese steel makers' earnings could follow a downtrend in a market awash with Chinese supply have kept their valuations about half that of the average Japanese company, despite the steel makers' two-year run of record profits.

Nippon Steel, the biggest beneficiary of strong worldwide sales of Japanese cars, booked a 55.9 percent surge in net profit in the year ended in March, compared with a 4.9 percent gain in 2005 by the world's fourth-biggest steel maker, South Korea's POSCO, which is being hit by a lower steel price in East Asia.

Fujiwara said an alliance with two smaller peers, Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., is generating benefits larger than it had paid.

''While we've spent some 40 billion yen for minority stakes in our allies, we are reaping 20 billion yen in profit every year from the alliance. That will grow further next year.'' he said.

Shares in Nippon Steel, which had risen on retail investors' margin buying, closed down 4.74 precent at 382 yen, while the iron and steel sector index ISTEL.fell 6.03 percent.

($1=113.54 Yen) REUTERS CS BD1602