UPDATE 1-Mexico's Cemex boosts U.S. concrete prices

(Adds analysts' estimate, Morgan Stanley report, stock quote)

MONTERREY, Mexico, Aug 4 (Reuters) - Mexico's Cemex, the world's No. 3 cement maker, said on Monday it is increasing its concrete prices in the United States, a key market, by $25 per cubic yard effective Oct. 1.

"Mounting fuel prices have created the need for a ready-mix price increase," said Gilberto Perez, president of Cemex USA. He said the hike would guarantee steady prices for its customers through January 2010.

Cemex (CX.N) (CMXCPO.MX) sells a concrete cubic yard for $120, meaning the company is boosting its prices by nearly 21 percent, analysts said.

"We are effectively removing all fuel surcharges and taking on fuel price risk through this time," Perez said.

Cemex said that producing ready-mix concrete is an energy intensive business and the sharp rise in fuel prices has driven up the costs of raw materials and delivery.

Morgan Stanley upgraded its rating on Cemex to "equal-weight" given the company's recent sharp decrease but ongoing weakness from its U.S. and Spanish operations were likely to continue putting pressure on the stock.

"Cemex is trading below book value with six days of short interest, thus meaningful additional downside looks unlikely," Morgan Stanley said in a report on Sunday.

"It may not be until well into 2009 that investors start to price in meaningful profit recovery for Cemex," it added.

Cemex shares gained over 4 percent in early dealings on Monday but traded about flat at 20.21 pesos at mid-morning. Its New York-traded shares were off 0.44 percent at $20.25.

Its local stock is trading nearly 40 percent below its price 12 months ago. (Reporting by Gaby Lopez and Cyntia Barrera Diaz)