Japan's Nippon Steel (5401.T)believes the global steel industry may need two to three yearsto recover from the current downturn, its chairman said.



The company does not expect an agreement with Toyota MotorCorp (7203.T) on cutting steel prices until iron ore importdeals are completed, Akio Mimura also told reporters.



Nippon Steel's regional peer, South Korean company POSCO(005490.KS), warned this week of lower sales and output in 2009and the worst January performance in its 40-year history assteel demand continues to remain weak, despite massive outputcutbacks globally.



'The global steel industry had a strong growth over the pastfive years and in return it may take a long time to recover,probably two to three years,' Mimura said.



Mimura reiterated that Nippon, the world's No. 2 steelmaker,may have to extend production cuts to more than the 2 milliontonnes it is currently planning for the six months to end-Marchbut it has no plan to shut down a blast furnace.



Its domestic rival JFE (5411.T) became the first Japanesecompany to idle a blast furnace this month, as demand foreverything from autos to home appliances slumps due to adeepening global economic recession.



Toyota Motor (7203.T), the world's top auto maker and thesingle largest customer of Nippon and JFE, spooked the industrysupply chain last month by warning that it may see its firstannual operating loss in 71 years.



It is slashing production and demanding a cut in steelprices. The Nikkei newspaper reported last month that Toyota haddemanded Nippon and other steelmakers cut steel prices by 30percent.



'It (the talks with Toyota) will be very difficult and...will be completed after iron ore and coking coal import talks,which haven't started yet,' Mimura said.



Asian steelmakers are sure to see a fall in iron ore pricesfor the first time in seven years, with some analysts expectinga decline of up to 40 percent.



Iron ore prices have nearly doubled and coking coal priceshave tripled this business year amid tight supply of the majorinputs in steel making.



JFE said earlier this month it wanted prices of iron ore tobe cut at least to 2007/08 levels, meaning Brazilian miners mustcut by at least 39 percent and their Australian counterparts byaround 45 percent.



Mimura declined to comment on the level of cuts that Nipponwants in negotiations with global mining majors -- BHP Billiton(BHP.AX) (BLT.L), Rio Tinto (RIO.L) (RIO.AX) and Vale(VALE5.SA)-- for the year starting April 1.



His remarks were made late on Saturday for release by newsmedia early on Sunday.