UPDATE 1-S.Korea POSCO to raise steel prices by 11.5 pct

(Adds price rise for other products, background)

SEOUL Jan 22 (Reuters) - South Korea's POSCO (005490.KS), the world's fourth-largest steel maker, said on Tuesday it will raise its hot-rolled steel prices by 11.5 percent, after other regional steel makers raised their prices.

The widely expected price increase would be the steel maker's first for hot-rolled steel, POSCO's key product, since July 2006.

Prices of hot-rolled steel will be raised to 580,000 won ($609) a tonne, up 60,000 won, effective from Feb. 1.

The South Korean steel maker also plans to raise cold-rolled steel prices by 65,000 won, or 10.8 percent, to 665,000 won a tonne.

In comparison, Baoshan Iron and Steel Co (600019.SS), the listed unit of China's largest steel maker, raised major steel product prices by as much as 8 percent in the first quarter.

POSCO, however, decided to maintain prices of steel plates for shipbuilding after it had raised prices by 9.9 percent to 665,000 won per tonne in October.

Other steel plate prices will be increased to 765,000 won a tonne, up 10.9 percent.

POSCO may increase steel prices again after April, to reflect higher raw material prices, the company said in a statement.

Asian steel makers face big price increases for iron ore and coal in 2008-2009 because of booming demand and supply constraints.

POSCO and global miners are undergoing contract negotiations for iron ore prices for the fiscal year beginning April 1, 2008.

Shares in POSCO dropped 3.78 percent to 471,000 won compared with the wider market's .KS11 4.4 percent fall. (Reporting by Kang Shinhye; Editing by Sei Chong)