The chairman of Nippon Steel Corp said demand in the global steel market has been stronger than expected and reiterated that its earnings forecasts for this business year were conservative.

Generally speaking the market is much better than we expected, Akio Mimura told a small group of reporters, adding that there have been no signs of a buildup of inventories in China or the United States.

Nippon Steel, the world's second-biggest steelmaker, last month forecast a 34 percent fall in group pretax recurring profit to 370 billion yen ($3.56 billion) for the year to March 2009, hit by soaring raw materials prices.

The market consensus is much higher at 495 billion yen, according to a Reuters Estimates poll of analysts.

Mimura said its earnings forecasts were conservative, reiterating what the company had told investors last month. ($1=104.01 Yen)

(Reporting by Nathan Layne and Taiga Uranaka)

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