Nippon Steel raises 06/07 profit f'cast by 8.7 pct

TOKYO, Sep 7 (Reuters) Nippon Steel Corp., the world's third-biggest steelmaker, raised its full-year profit forecast by 8.7 percent on Thursday after export prices rebounded while demand for high-quality steel for cars and ships stayed strong.

The company, the biggest beneficiary of strong worldwide sales of Japanese cars, said it would pay a 4 yen dividend for the April-September first half, its first interim dividend in 14 years.

Nippon Steel now expects pretax recurring profit before special items of 500 billion yen (.28 billion) for the full year to next March, up from the 460 billion yen it forecast in April.

That compares with a consensus estimate of 490.75 billion yen in a poll of 16 analysts by Reuters Estimates.

Steel firms will revise their earnings estimates again in March after fully taking into account the results of their price talks with carmakers and shipbuilders.

Chinese steel mills' export drive geared to the United States and Europe tightened Asia's steel market in the first half, helping boost Japanese steelmakers' export prices of hot coil steel by more than 20 percent in July-September from the previous quarter.

Continued strong demand for Japanese cars and ships also propped up shipment volumes at steel firms.

Shares in Nippon Steel rose 7.5 percent from April to August, compared with a 4.2 percent fall in the Tokyo bourse's iron and steel subindex ISTEL.and a 5.4 percent fall in the benchmark Nikkei average REUTERS PKS GC1100