TOKYO, Feb 5 (Reuters) - Nippon Steel on Thursday widened its net-loss forecast for the financial year ending in March to 70 billion yen ($446.1 million) due in part to a fire at a blast furnace, after it swung to a loss in the nine months to December.

Japan's biggest steelmaker previously expected a loss of 60 billion yen on charges related to a $15 billion deal to buy U.S. Steel that closed in June and after exiting steel assets in Brazil.

The company's full-year performance will also be dragged down by steel exports from China, sluggish domestic demand and by a charge following a fire at its steel facility in Muroran in Hokkaido.

The Muroran blast furnace, shut down in December and set to resume operations in March, is expected to hit Nippon Steel's earnings by 40 billion yen, Chief Financial Officer Takahiko Iwai told a results briefing.

For the nine months through December, the company posted a 45 billion yen net loss versus a profit of 362.1 billion yen a year earlier.

Iwai said U.S. Steel's performance is expected to recover next fiscal year as the U.S. steel market has rebounded, though he declined to give a concrete profit estimate.

For Nippon Steel, overseas operations, particularly in the U.S. and India, remain key growth drivers.

"India's steel business saw margins decline, but has been recovering since bottoming out in December," Iwai said, adding the company aims to accelerate capacity expansion there.

Reuters reported on Thursday, citing sources, that Nippon Steel was considering selling as much as 500 billion yen of convertible bonds, as it needs capital to expand its overseas business and for decarbonisation initiatives.

The company also needs long-term funding to replace a bridge loan it took out for its U.S. Steel acquisition last year that totalled around 2 trillion yen, the sources said.

Nippon Steel will proceed with optimal funding options as the bridge loan is expiring in June, Iwai said, adding that nothing was decided regarding the funding.