WUHAN Iron and Steel Group, China's third-largest steel mill, has raised prices for January delivery following a similar move by Baoshan Iron and Steel Co, reflecting a bullish outlook for demand.

Wuhan Steel raised hot-rolled coil prices by between 100 yuan (US$15) and 150 yuan per ton and cold-rolled coil prices by 100 yuan per ton in order to be competitive, analysts said, adding that the increases were smaller than those by Baosteel.

"The rises in steel prices, although smaller than Baosteel, could fully cover higher raw material costs," said Zhou Xizeng, an analyst at Citic Securities Co.

But Yang Baofeng, an analyst at Orient Securities Co, expressed caution over the trend to raise steel prices in the near term as "the industry could face oversupply again" in the future.