POSCO agrees sharp Australian coal price hike

South Korean steelmaker POSCO said on Monday it has agreed to a sharp rise in coal prices with an Australian miner for fiscal year 2008.

POSCO, the world’s fourth-largest steelmaker, had agreed on a 205 percent to 210 percent hike in coking coal prices with the Australian supplier from April 1, a company spokeswoman said.

Earlier in the day, local media reported that the hike could be as high as 215 percent rise.

Last week POSCO said it was considering a rise in steel prices, which would be the second this year, soothing concerns that rising costs of raw materials, such as iron ore and coking coal, will eat into its profits. [ID:nSEO121457]

POSCO had agreed to a 65 percent hike in iron ore prices with Brazilian mining firm Vale in February but has yet to deal with other mining majors such as BHP Billiton and Rio Tinto .

The term price of iron ore has risen fivefold since 2001, while coal prices have surged this year because of strong demand from China and supply disruptions in Australia caused by port conditions and poor weather.

Shares in POSCO, the country’s second-biggest listed company after Samsung Electronics, closed 0.39 percent lower at 515,000 won, underperforming the wider market’s 0.4 percent gain.

POSCO last raised its hot-rolled steel prices by 11.5 percent from Feb. 1 and cold-rolled steel prices by 10.8 percent.