Nippon Steel Corp., JFE Steel Corp. and other Japanese steelmakers will cut production for the first time in about three years because of a decline in demand, Nikkei English News said, without citing anyone.

The industry saw orders decline in August after crude-steel production had increased each month for the previous 28, the news service reported.

JFE Steel will carry on with its plans to build a new blast furnace in Southeast Asia amid expectations that demand will increase in the medium to long term, Nikkei reported.

European producer ArcelorMittal plans to cut production by about 15 percent. The four leading Chinese steelmakers and India’s Tata Steel Ltd. also plan to curtail output, Nikkei said.

Tokyo Steel Manufacturing announced that it has reduced the selling price by JPY 23,000 to JPY 35,000 per tonne for all items for distributors for November 2008 order.

The price cut is the widest ever and the cut is JPY 25,000 for hot rolled coil and JPY 35,000 for H beam, both of which decreases by total JPY 45,000 from the peak in August 2008 order.

Tokyo Steel expects the lower price could encourage domestic market to find the bottom while the lower price could prevent import from increasing.

Nippon Steel Corp and JFE Holdings Inc, Japan’s top two steelmakers, are likely to raise their annual profit forecasts due to lower costs and price hikes, the Nikkei business daily said on Monday.

Shares in Nippon Steel rose 3.2 percent to 326 yen, while JFE climbed 5.4 percent to 2,345 yen as of 0200 GMT, helping Tokyo’s iron and steel subindex rise 2.4 percent.

Japanese steelmakers have been widely expected to lift their earnings outlooks when they announce first half results later this month given a drop in shipping charges, and the recent slide in the price of oil and raw materials such as scrap iron.

Both Nippon Steel and JFE have also raised their product prices, and the contribution from that move had not been factored into their profit forecasts as of July, the Nikkei said.

Nippon Steel will likely raise its group recurring profit forecast for the year to March 2009 to about 520 billion yen from its forecast in July for 450 billion yen, the Nikkei said.

The reported figure would be roughly in line with the average estimate of 518 billion yen from 16 analysts polled by Reuters Estimates.

The Nikkei said JFE Holdings would raise its annual profit forecast to about 510 billion yen from its July projection of 450 billion yen. The new figure would be slightly above the consensus projection of 503 billion yen.

Goldman Sachs analyst Toru Yaezawa said in a research note on Monday that the market had already discounted the expected upward revisions from the two steelmakers.

Japanese steelmakers still face a risk in the crumbling auto market. Both Nippon Steel and JFE may have to scale back production if big automakers, which are among key clients, significantly cut output, the Nikkei said.

“I expect Japanese steelmakers to maintain the current relatively solid momentum at least until the end of this calendar year,” said Takashi Murata, analyst at Daiwa Institute of Research. “But I’m a bit concerned whether serious credit crunch in overseas markets will have any impact on export

Tokyo Steel Manufacturing Co., Japan’s biggest maker of steel girders, cut prices for all products next month after reductions by Chinese rivals and a decline in iron and steel scrap costs.

The price of hot-rolled coil will drop 26 percent to about 72,000 yen ($708) a metric ton under November contracts, compared with 97,000 yen this month, Managing Director Naoto Ohori said today at a media briefing in Tokyo. The price of reinforcing bars was reduced 38 percent to 57,000 yen a ton.

Asian rivals such as Baoshan Iron & Steel Co., China’s biggest steelmaker, have cut prices amid slowing demand from carmakers and builders. China’s economy grew 9 percent in the third quarter, the slowest pace in five years, according to data released today in Beijing.

The Japanese company’s price cuts were bigger than the 20,000 yen a ton reduction for hot-rolled coil predicted by Katsuya Takeuchi, an analyst at UBS AG in Tokyo, in an Oct. 17 note. The move was designed to “forestall any influx of imports” from China, which cost about $750 a ton, he wrote.

Tokyo Steel, which had gained as much as 7.1 percent before today’s announcement, dropped 0.3 percent to 769 yen at the 11 a.m. break in Tokyo trading. The stock has more than halved in the past year.

Japan’s scrap iron and steel prices have slumped to the lowest in more than two years as the slowing global economy prompted some mills in South Korea and Taiwan to schedule output cuts, paring demand. The nation’s scrap, the benchmark for Asia, has plunged 62 percent from the record set in mid-July.