* Coking coal prices to hold in $150-200/T range
* U.S political uproar carries fresh risk
* Concerns over U.S. President Trump's protectionism
By Yuka Obayashi and Ritsuko Shimizu
TOKYO, May 23 (Reuters) - Japan's top steelmaker Nippon Steel & Sumitomo Metal is considering measures to counter volatile coking coal prices, such as contracts of varying lengths and seeking out supply sources outside of Australia, its senior official said.
Japanese steelmakers have suffered heavy costs from surging coking coal prices and were forced to scramble for alternative supplies after Cyclone Debbie hit Australia in late March, cutting rail lines to ports in the world's biggest coking coal export region.
The price of the vital steelmaking ingredient has also been unusually volatile over the last year, nearly quadrupling between March and late November 2016, and halving by end-March 2017, before the cyclone sent prices higher again.
"Dealing with volatility in raw materials prices has been a long-standing issue ... but with recent volatility, it has become more important to smooth out price impact and secure stable supply," Toshiharu Sakae, Nippon Steel's executive vice president, told Reuters in an interview last week.
One way to do that is supply portfolio management, he said, possibly taking up one-, three-, and six-month or annual term deals, instead of just buying coking coal on a quarterly basis.
Other options are buying lower quality coals, procuring more supply from areas such as North America, Mozambique, Russia and Mongolia, and investing in mines, he said. Russian mines could possibly be a target, he added.
"It's not ideal for our sources to be so concentrated in Australia."
In 2016, Japanese steelmakers bought about 71 percent of the 59.9 million tonnes of coking coal they consumed from Australia.
Sakae said coking coal prices should stay at $150-$200 a tonne based on supply and demand fundamentals, with iron ore prices holding around $60-$70 a tonne.
Negotiations between steel mills and coal producers to set prices for the April-June quarter are continuing, but Nippon Steel aims to settle this month, he said.
In April, Nippon Steel reported a 13 percent fall in recurring profit for the year ended on March 31 due to higher raw materials costs, and skipped issuing an earnings forecast for the fiscal year just begun.
"The difference between April and now is a fresh fear over the U.S. political uncertainty," Sakae said, pointing to the potential impact on the global economy from the political uproar that has engulfed the United States.
"It's our biggest concern."
A flurry of U.S. political controversies - including President Donald Trump's firing of Federal Bureau of Investigation director James Comey - has rattled financial markets this month, and steel protectionism also seems to be accelerating under Trump.
One worry is that U.S. protectionism could mean that steel products with no other place to go will flow to Japan, he said. (Reporting by Yuka Obayashi and Ritsuko Shimizu; Editing by Tom Hogue)