POSCO has decided to raise the prices of its high value-added electrical steel products for domestic consumption, a move expected to lead to a hike in prices of automobiles, refrigerators and other home appliances, industry sources said Thursday.

According to the sources, the Korean steelmaking giant recently decided to raise non-oriented and oriented electrical steel prices by 50,000 won ($40.73) and 200,000 won per ton, respectively, in the middle of this month.

The price increases for the steel materials, usually used as key parts in electric vehicles and home appliances, reflected higher costs stemming from the won's recent descent against the greenback.

This is also in line with price hikes by rivals in China, which are pushing to trim their supply glut in the market, they said.

Market observers expect that the price hike by POSCO, which holds more than 50 percent of the market here, will likely spark a domino effect by causing other smaller companies to follow suit.

It could also have a ripple effect on other industries given that steel is a key material for cars and electrical products, raising worries that it could add wrinkles to the already slumping economic conditions, they added. (Yonhap)