* Impact seen on iron ore from rising supply, slower China demand
* Company buys about 70 mln T of iron ore per year
* Expects gradual recovery trend in metallurgical coal prices
By Yuka Obayashi
TOKYO, Oct 1 (Reuters) - Nippon Steel & Sumitomo Metal Corp , Japan's top steelmaker, sees iron ore prices at $80-$90 a tonne in the next three to four years as expanding supplies exert pressure, an executive overseeing procurement of the raw material said.
Nippon Steel buys about 70 million tonnes of iron ore a year, four-fifths of which come from the three biggest suppliers, Brazil's Vale and Anglo-Australian Rio Tinto and BHP Billiton .
Lower prices of the raw material will support margins of the steelmaker at a time when doubts are growing about Japan's economy and domestic demand for the alloy is uncertain. Its customers such as Toyota Motor Corp could pressure Nippon Steel to lower prices of steel products and it also faces growing competition in overseas markets from Chinese exports.
"Low-cost global suppliers are still making profit under the current market and they are expected to continue expanding their output capacities as planned through 2017 and 2018, which will add about 220-300 million tonnes of global supply," said Toshiharu Sakae, managing executive officer of Nippon Steel.
Over the same period, consumption will grow only by about 100 million tonnes as demand growth at the world's biggest iron ore user, China, is weakening, Sakae told Reuters in an interview on Tuesday.
"Our best guess is that the median range of iron ore prices will be between $80-$90 over the next three to four years although the prices may temporarily fall below $70 or rise above $100 with short-term volatility," the executive said.
Benchmark iron ore .IO62-CNI=SI fell to $77.50 a tonne on Tuesday, its lowest since September 2009, and has lost more than 42 percent this year, according to data provider Steel Index, due to both rising supply and slowing Chinese demand.
U.S. investment bank Goldman Sachs has forecast iron ore averaging at $80 a tonne in 2015, and last month slashed its 2016 estimate by 4 percent to $79 and its 2017 projection by 8 percent to $78.
The story this year has been somewhat similar to iron ore's for another steelmaking ingredient - coal.
The benchmark settlement price for hard coking metallurgical coal stood at around $120 per tonne for the April-June quarter and the July-September quarter, down 16 percent from the January-March quarter, according to an industry source, due to shrinking Chinese imports.
Sakae, however, said coal prices are expected to turn to a gradual recovery trend faster than iron ore as supply expansion plans are not that big and some of the projects are behind schedule, with India expected to drive global demand growth.
"Many suppliers, including some of major mines, are operating at a loss under the current coal prices and we are seeing some mines going into care and maintenance," Sakae said.
"I don't think this price level will last for long." Nippon Steel buys about 30 million tonnes of coking coal a year.
Coal companies have been idling high-cost mines following a three-year slump in metallurgical, or steelmaking, coal prices.
Sakae also said it is difficult to predict coal prices as they are highly volatile. But prices will gradually recover over the next three-four years, he said. (Additional reporting by Manolo Serapio Jr. in SINGAPORE; Editing by Muralikumar Anantharaman)