UPDATE 1-Taiwan's China Steel to lift prices 1st time this yr

* China Steel to raise prices 7 percent in Jul-Aug from June

* Previous output cuts led to tight supply

* Analysts say few signs of demand recovery yet

(Adds details, quotes)

By Lin Miao-jung

TAIPEI, June 10 (Reuters) - China Steel (2002.TW), Taiwan's
top steel maker, will lift domesticsteel product prices by an
average of 7 percent in July and August from June, marking its
first price rise this year, due to a supply squeeze.

China Steel, which adjusts its prices twice in a quarter, has
been cutting prices since the beginning of this year. The last
time it adjusted its prices was in early June, when it lowered
prices by an average of 9.41 percent from the April-May period.

"We are raising prices due to short supply as steel makers
have been cutting production during the global downturn," L.M.
Chung, a vice-president at China Steel.

Global consumption for steel products will likely fall 14
percent this year, China Steel said in a statement quoting
industry data, as a steep downturn had crimped demand in many
sectors, including construction and electronics.

Analysts said the price rise did not indicate growth in
demand.

"We are still monitoring global demand as we don't see any
signs of a demand recovery yet, although we're quite certain
prices will not fall again," said Jack Chang, an analyst at
Yuanta Securities.

The announcement came after Taiwan's markets closed. China
Steel's shares rose 2.95 percent, outperforming the main TAIEX
index's .TWII 0.75 percent gain.

(Writing by Lee Chyen Yee; Editing by Chris Lewis)