UPDATE 1-Cemex to raise Mexico cement prices by 5 pct-source

(Updates with details, quote, background)

MONTERREY, Mexico, July 4 (Reuters) - Mexico's Cemex (CX.N) (CMXCPO.MX), the world's No. 3 cement producer, plans to increase its local cement prices by an average of 5 percent starting on Monday, a source close to the company said on Friday.

"This increase is due to higher world energy costs and the big impact on the company's costs," the source told Reuters.

Building material distributors consulted by Reuters in the northern Mexican city of Monterrey, where Cemex is based, said the price of a 110-pound (50-kg) bag of cement will rise to about 105 pesos ($10.19) from the current 100-peso average price.

Cemex, which has operations in more than 50 countries, faces a housing slowdown in its key European and U.S. markets and is also trying to reduce costs following its takeover last year of Australia-based building materials company Rinker.

Mexico represents 16 percent of Cemex's total annual sales.

Cemex last increased Mexican cement prices in December 2007 with an average 10 percent hike. ($1 = 10.3 pesos) (Reporting by Gabriela Lopez; Editing by Jonathan Oatis)