By Alex Kapadia
Hankook is considering increasing the price of its tyres around the world, according to a Bloomberg report.
South Korea’s biggest tyres manufacturer blames the rising cost of raw materials for the possible price hike.
The Seoul-based company has already raised prices in the US due to the higher commodity costs.
Yii Seong Ha, a spokesman for Hankook, told the financial news organisation: “We’re considering raising prices in other regions.
“The timing and size of increase may differ region by region, but a price increase seems inevitable after raw material costs including natural rubber climbed.”
The market reacted positively to the news and Hankook climbed 4.1 percent at the close of the Korea Exchange.
Kim Byung Kuk, an analyst at Daishin Securities, said speculation that the company may raise prices in Europe and other markets boosted shares.
Kim Yong Soo, another analyst at SK Securities, added: “The company will be able to raise prices by 8 percent, on average, in 2010, and the first increase may come soon in the first quarter.
“The price increase may not fully cover the increase in raw material costs, but strong global demand for cheaper tyres such as Hankook’s should limit the impact.”