RPT-UPDATE 1-Nippon Steel,Xstrata agree to quadruple price-paper

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TOKYO, July 31 (Reuters) - Nippon Steel Corp (5401.T) and four other major Japanese steel makers have reached an agreement with Xstrata (XTA.L) for a roughly 3.6-fold price hike for low-grade metallurgical coal, the Nikkei business daily reported on Thursday.

The paper said the price hike will increase industry-wide costs by some 100 billion yen ($925.1 million), and steel makers plan to pass on higher prices to customers like electronics makers and shipbuilders.

A Nippon Steel spokesman declined to comment.

Xstrata and Japanese steel makers, also including JFE Steel Corp of JFE Holdings (5411.T), Sumitomo Metal Industries (5405.T), Kobe Steel (5406.T) and Nisshin Steel (5407.T), are expected to seal the price hike deal as early as next week, the paper said.

The contract price for low-grade coal, which Xstrata mines in the New South Wales, Australia, will be hiked to about $240 per tonnes in the current business year, the paper said.

Japanese steel makers have also agreed price hikes of 65 to 96.5 percent for iron ore, and the industry-wide raw materials costs will skyrocket to about 3.5 trillion yen in this business year, the paper said. (Reporting by Sachi Izumi and Yuko Inoue)