Nippon Steel Corporation will seek a price increase of nearly 40 per cent from automakers and other customers for its main steel products to offset soaring raw materials cost, the Nikkei business daily reported.

Nippon Steel, the world's second-biggest steelmaker, declined to comment, saying the company did not reveal details of price talks with customers.

However, such an increase would be in line with previous comments by the firm.

Nippon Steel has said recent spikes in iron ore, coal and other materials prices would cost it 1 trillion yen ($9.7 billion) more this business year - which equates to a 38 per cent cost increase, or 30,000 yen per tonne.

Japanese steelmakers face increasing pressure to raise prices after agreeing to a higher-than-expected price of $300 per tonne for coking coal this month, triple the price it paid last year.

Last month, smaller peer JFE Holdings, the world's third-biggest steelmaker, said the company was seeking a price hike from customers of about 25 per cent, or 20,000 yen per tonne.

Makers of cars, machinery and electronics products are resisting a large price hike, calling on steelmakers to tighten their belts and absorb rising costs.

Nippon Steel has undertaken to step up cost-cutting efforts. In recent years it has already reported savings of more than $300 million a year in cost cutting and greater efficiency.-Reuters