-- Posco, Asia's third-biggest steelmaker, will increase product prices for a third time this year to recover surging costs for iron ore and coal and bolster profits.

The price of benchmark hot-rolled coil will rise 150,000 won ($145) a metric ton, or 21 percent, to 850,000 won from July 1, the Pohang, South Korea-based company said today in a statement. The steelmaker raised prices in February and April, and the latest jump takes the cumulative gain this year to about 63 percent.

Steelmakers worldwide are passing on higher costs to customers, fanning inflation even as central banks in Asia try to rein in the rate of price gains. Baosteel Group Corp., China's biggest steelmaker, yesterday agreed to pay almost double for Australian ore supplied by Rio Tinto Group, a record increase.

``The three price increases this year are enough to cover cost rises,'' said Kim Gyung Jung, an analyst at Samsung Securities Co. The latest ``hike will increase Posco's annual revenue by 3 trillion won.''

Posco shares, which have fallen 9 percent since the start of the year, dropped as much as 3.5 percent to 520,000 ton today, and were at 527,000 won at 2:50 p.m. local time. The price increase, which was flagged by Posco on June 9, was announced at 2 p.m.

The price of cold-rolled coils will climb 165,000 won to 950,000 won, while heavy steel plates, used to make ships, will rise 135,000 won to 920,000 won, the Posco statement said. Hot- rolled and cold-rolled coils are processed and used to make cars and household appliances.

Higher Costs

Posco ``cannot help'' an additional increase in prices, President Yoon Seok Man said on June 9. Raw-material costs were gaining ``more than expected,'' Yoon said. Mills are paying three times more for coking coal this year on increased demand.

The International Monetary Fund said today that South Korean policy makers should focus on controlling inflation to help sustain the economy's expansion. Inflation was 4.9 percent in May, the fastest rate in seven years.

``High global food and fuel prices are expected to weigh on consumption and are contributing to rapidly rising prices,'' the IMF said in a statement. ``Macroeconomic policies should focus for now on controlling inflation.''

China's Baosteel will pay as much as 97 percent more for so- called Pilbara blend ore in the year that began April 1, Rio said yesterday. The iron-ore increase is likely to put pressure on other Asian steelmakers to accept the record gain.

Posco posted better-than-expected profit in the first quarter of 1.03 trillion won because of price gains and cost reductions. Of the 33 analysts whose ratings are tracked by Bloomberg, 31 have ``buy'' recommendations on the stock, with a sole ``sell'' call.