* Mitsubishi ups FY net profit forecast by 32 pct
* Expects coking coal prices to fall by end-March
* Lifts resource profit forecast to 106 bln yen from 10 bln yen (Recasts with earnings and quotes)
By Yuka Obayashi
TOKYO, Nov 4 (Reuters) - Japan's Mitsubishi Corp 8058.T raised its full-year net profit forecast by 32 percent as it expects this year's spike in coking coal prices and cost cuts at mines to boost its earnings, but it also warned of a sharp drop in coal prices by end-March.
Premium hard coking coal prices .PHCC-AUS=SI in Australia, which dominates global exports, rose to above $268 a tonne this week, meaning values have climbed more than 240 percent in a rally this year after China moved to cut overcapacity in its coal sector. which jointly owns seven operating coking coal mines with BHP Billiton (LON:BLT) BHP.AX in Australia, now forecasts 330 billion yen ($3.2 billion) in consolidated net profit for the year to March 31, versus previous guidance of 250 billion yen.
"We've lifted the outlook as the surge in coking coal prices will likely boost our profit from resource segments to 106 billion yen from a previously-estimated 10 billion yen," Chief Financial Officer (CFO) Kazuyuki Masu told a news conference on Friday.
The prediction underscores a V-shaped recovery from last year when the company booked its first-ever annual net loss due to massive writedowns on a slump in commodity prices.
But the latest guidance is also based on an assumption that coking coal prices would fall sharply by the end of this financial year at the end of March, Masu said, without disclosing more details.
"It's abnormal to see such a spike. If the coal prices could surge this much in a short period, they could drop the same way," Masu said.
A company spokesman later declined to say how a sharp drop in prices would impact performance in the coming financial year.
This year's rocketing coal prices are also helping its rivals although analysts have said Mitsubishi benefits the most among Japanese trading companies as it has the biggest exposure to coking coal assets.
Mitsui & Co 8031.T also revised its full-year profit forecast up by 10 percent on Wednesday on higher coking coal prices. the April-September half, Mitsubishi reported a 16.1 percent climb in net profit to 179.8 billion yen, as healthy profit from metals offset lower earnings from non-resource segments such as machinery and infrastructure.
"Our strategy won't be affected by a swing in profits reflecting resource prices. We will keep a tight rein on costs to strengthen tolerance against potential plunge in commodity prices, and will continue selective investments," Masu said.
Mitsubishi Chief Executive Officer Takehiko Kakiuchi said in April that it won't boost its natural resource assets on a net basis for the next three years. = 103.2300 yen)