RPT-PREVIEW-POSCO Q1 profit seen down, focus on steel price hike

* What: Q1 earnings

* When: Friday

* Update on price hike to absorb soaring commodities prices (This is a repeat of an earlier story ahead of POSCO's earnings announcement.)

By Miyoung Kim

SEOUL, April 8 (Reuters) - South Korea's POSCO (005490.KS: Quote, Profile, Research), the world's fourth-largest steelmaker, could report lower quarterly profit due to weak sales of stainless steel products, but investor focus will be on its price plan to absorb soaring raw material costs.

POSCO is expected to raise steel prices by 15-19 percent, as prices of iron ore and coking coal, which account for more than a fifth of production costs, are seen rising by around 70 percent and 200 percent respectively this year.

POSCO agreed in February to a 65 percent increase in iron ore prices with Brazilian miner Vale (VALE5.SA: Quote, Profile, Research) and this week to a 205-210 percent jump in coking coal prices with an Australian supplier from the second quarter.

"Prospects for a better 2008 remain intact as global steel prices continue to rise, but margins could come under pressure due to higher raw material prices and POSCO has to raise prices by at least 150,000 won (a tonne) to offset that," said CJ Investment and Securities analyst Jung Jiyun.

POSCO, which sells three quarters of its products in the domestic market, is set to report January-March net profit of 934 billion won ($958 million), according to a poll of nine analysts by Reuters Estimates, on 5.8 trillion won in sales.