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Japan's biggest steelmaker Nippon Steel Corp plans to almost double crude steel output capacity at its India's Hazira plant to secure more of the growing market, an executive said.

The expansion plan comes despite a growing concerns about a slowdown in the global economy amid rising interest rates and weaker demand in top buyer China.

"We are accelerating investment in India," Takahiro Mori, executive vice president at Nippon Steel, told Reuters on Tuesday. "In terms of steel, India is regarded as the only market that will grow significantly."

In 2019, Nippon Steel and ArcelorMittal jointly bought India's bankrupt Essar Steel, now called AM/NS India, and have been considering expanding the venture.

Annual output capacity at the Hazira plant in western India would increase to between 14 million and 15 million tonnes from about 8 million tonnes by building new blast furnaces, he said, without giving a value for the new investment or other details.

"Our main purpose is to grab growing local demand," he said, adding that Nippon Steel would consider further expanding Hazira and building a new steelmill in eastern India.

AM/NS India said last week it would buy some infrastructure assets from Essar Group for $2.4 billion to strengthen its steel business.

"The acquisition will give higher flexibility for AM/NS to expand operations," Mori said.

Steelmakers face an uncertain outlook, with volatile prices for coking coal, iron ore and other raw material caused by the Ukraine crisis and with China's weak steel output.

Coking coal now unusually trades at a steep discount to thermal coal, used mainly in electricity generation, which is booming because of disruptions to Russian energy supplies.

Nippon Steel was using some coking coal as an alternative to thermal coal to a limited extent as only coking coal of a particular quality could be used for this purpose, Mori said.

In August, Nippon Steel forecast a 6% drop in annual net profit, a smaller fall than analysts expected, saying it could pass on higher prices despite lower output.

Nippon Steel, now in final talks with automakers and other major customers, wanted to hike sales prices by at least 40,000 yen ($287) a tonne for the October-March period, compared with April-September, Mori said.

"We have borne the impact of higher material costs and the lower yen," Mori said. "We are determined not to give in to passing on the higher costs to product prices."

($1 = 139.1600 yen)