Reporting by Miyoung Kim Editing by Ben Tan China Japan South Korea

(Reporting by Miyoung Kim; Editing by Ben Tan) China Japan South Korea. "(But) there is no point overpaying when cars are notselling and your steel supplier is running below 60 percentcapacity utilisation ... We believe prices are set to drop anadditional 10,000 yen at least, when iron ore prices are agreedon," said CLSA analyst Jeremie Capron. [ID:nSEO343091] In Japan, Nippon Steel (5401.T) won a smaller-than-expectedauto steel price cut of 15,000 yen ($152.6) a tonne from anestimated 100,000 yen in a deal with Toyota Motor (7203.T),offering rare glimmer of hope for steelmills as they continueto slash output by almost half due to collapsing demand.

[ID:nSYD156464] Some traders are now expecting China to raise export taxrebates on hot-rolled coil after the product was excluded fromrecent tax adjustments and as China seeks to improve exports ofsteel, which shrank 60 percent last month. But changes in the tax system are angering regional buyersincluding South Korea, China's top overseas steel market. But itacknowledged steelmakers faced tough times and were operatingat loss on waning demand. China's March steel output was little changed from a yearago, while global production dropped 24 percent, data showedthis week, suggesting that huge overproduction in the world'sbiggest steel producer may continue to depress prices.[ID:nLL49687] In the first quarter, China's steel output rose 1.4 percentto 127 million tonnes and record imports of iron ore for thesecond straight month, which may lead to firm growth in steelproduction in the coming months. Short bursts of demand-led price recovery, followed byprice declines could continue until 2012," Goldman Sachsanalysts said on Thursday.

"We believe that no sustainable rise in steel prices ispossible as there is still a lot of idle capacity in the world... China's September rebar SRBU9 fell 3.2 percent this weekto 3,505 yuan after two consecutive weekly gains, while wirerod for September delivery SWRU9 dropped 2.8 percent to 3,404yuan after rising 4.4 percent last week. The price fall was broad-based, with the newly launchedconstruction steel futures, which posted strong gains last weekon signs of economic recovery in China, also retreating fromrecent highs. For a graphic on Chinese spot steel prices, click: here "Demand has picked up a little bit and trader inventory hasalso come down in tandem, but the recovery remains fragile andanecdotal," said a Chinese steel trader. Prices of China's benchmark hot-rolled coil fell 4.2percent to around 3,190 yuan ($467.2) a tonne this week,unchanged from 3,245/3,415 yuan quoted last week, data fromMetal Bulletin showed. * Prices down 4 pct as demand remains weak China  |  Japan  |  South Korea * Traders expect export tax rebates on hot-rolled coil * Nippon wins small 10 pct price cut in auto steel supply By Miyoung Kim SEOUL, April 23 (Reuters) - Chinese spot steel pricesdropped 4 percent to a five-month low, reversing firm trade inrecent weeks, as sporadic evidence of demand recovery in theauto and construction sectors failed to translate intobroad-based buying amid steady output growth.