South Korean steelmakers have raised prices of automotive steel for the first time in four years, people familiar with the matter said Monday, a move that could boost their bottom lines.

Posco, the country's largest steelmaker, reached a deal with Hyundai Motor Co. and Kia Corp. to raise the price of a ton of automotive steel to 50,000 won ($45), they said.

The move is meant to reflect the increased costs of iron ore, one of the main raw materials used in steel production.

The price of iron ore jumped to $190.51 per ton on May 28, a sharp increase from $97.09 on the same date last year, according to data from the Korea Resources Corp.

Hyundai Steel Co., the second-largest steelmaker, also said it has struck a deal with its captive buyers, Hyundai Motor and Kia Corp., over raising the price of a ton of automotive steel to 50,000 won.

Hyundai Steel earns about 30 percent of its overall sales by selling steel sheets to Hyundai and Kia. They are all affiliates of Hyundai Motor Group, the world's fifth-biggest carmaker by sales.

Analysts said steelmakers can pass higher raw material prices onto corporate clients through a price hike, which in turn is expected to improve the bottom lines of the steelmakers.

For the three months that ended March 31, Hyundai Steel posted a net profit of 219.9 billion won, shifting from a loss of 115.4 billion won a year earlier.

Posco said its first-quarter net profit soared 162 percent on-year to 1.13 trillion won on robust demand amid the global economic recovery from the COVID-19 pandemic.

Hyundai Steel said it plans to hold negotiations with the big three shipbuilders -- Daewoo Shipbuilding & Marine Engineering Co., Korea Shipbuilding & Offshore Engineering Co. and Samsung Heavy Industries Co. -- in the coming weeks over a price hike of thick steel plates.

Korea Shipbuilding & Offshore Engineering manages three shipbuilding units -- Hyundai Heavy Industries, Hyundai Mipo Dockyard Co. and Hyundai Samho Heavy Industries.

Meanwhile, Posco has reached a separate deal with the three shipbuilders over prices of thick steel plates, a person familiar with the matter said, without elaborating. (Yonhap)