SOUTH KOREA'S POSCO said on Thursday it was considering a rise in steel prices, easing fears that rising raw material costs will hit its earnings, and lifting its shares to a four-week high. The company, the world's fourth largest steelmaker, also said it may bid for Daewoo Shipbuilding, which analysts say could fetch nearly $5.1 billion, and was considering buying a stake in a Chinese firm. "We are considering raising steel prices but details in terms of the timing and the level of the price hike haven't been decided,' a POSCO spokesman said. The potential price hike, which would be the second this year, soothed concerns that rising costs of raw materials, such as iron ore and coking coal, will eat into its profits. POSCO agreed to a 65% hike in iron ore prices with Brazilian mining firm Vale in February but has yet to deal with other mining majors such as BHP Billiton and Rio Tinto. The term price of iron ore has risen fivefold since 2001, while coal prices have surged this year because of strong demand from China and supply disruptions in Australia caused by port conditions and poor weather. Its shares hit a 10-month low last month, unseated by concern that the level of its price hike may lag rivals, as the new South Korean government moves to curb increasing inflationary pressure. Taiwan's China Steel Corp said in March it would raise its domestic steel prices 19% in the second quarter and China's Baoshan Iron and Steel hiked their product prices by a higher-than-expected 17-20%. Separately, POSCO told the Korea stock exchange that the firm was considering buying a stake in a Chinese rival, as it seeks to expand its presence in the world's largest but most fragmented steel market. POSCO has been widely tipped by analysts to bid for Daewoo Shipbuilding to lock in a big buyer of its steel products. "We have been interested in adding shipbuilding business to our portfolio and in that sense we are interested in Daewoo Shipbuilding,' the spokesman said. Daewoo, the world's No. 3 shipbuilder by sales, has been put up for sale by state-run Korea Development Bank, which plans to pick a preferred buyer around August.