Nov. 29 (Bloomberg) -- Asian stocks advanced, led by Posco and JFE Holdings Inc., on speculation steelmakers will raise prices further amid global shortages.

``We've been quite bullish on steelmakers,'' said Masaki Iso, who oversees $7.6 billion as head of Japanese equities at Yasuda Asset Management Co. in Tokyo. ``The supply shortage will probably continue into next year.''

Mitsui O.S.K. Lines Ltd. led gains by marine transport companies after shipping costs for iron ore, coal and other dry- bulk commodities rose to records. Steel consumption in China, which uses more of the metal than the U.S. and Japan combined, may climb 8 percent in 2005 from this year, China's State Information Center said Nov. 16.

Morgan Stanley Capital International's Asia-Pacific Index added 0.9 percent to 97.44 at 3:25 p.m. in Tokyo. The index that tracks shares of 117 Asian materials companies, including Posco and JFE, climbed to its highest since August 1996.

Japan's Nikkei 225 Stock Average added 1.3 percent to 10,977.89, while the broader Topix index climbed 1.1 percent.

China's stocks fell, with the Shanghai Composite Index heading for its longest losing streak in almost six months. Stock benchmarks also fell in Indonesia, while they rose in all other markets around the region. The Philippines market was closed for a public holiday.

Price Increases

The MSCI Asia-Pacific Index has advanced 6.6 percent in November, set for its fourth monthly gain. The regional materials index has climbed 9.7 percent during the period, making it the best performer among the 10 industry groups that make up the regional benchmark.

China's booming economy along with some automakers saying they're seeking new sources of steel fueled speculation that demand for raw materials will increase.

Nissan Motor Co., which said last week it will halt some vehicle production because it doesn't have enough steel, will import the metal from Luxembourg-based Arcelor SA, the world's biggest steelmaker, the Nikkei English News said.

Toyota Motor Corp., the world's largest automaker by value, will buy steel from China's Shanghai Baosteel Group Corp. and increase purchases from Posco because of a shortage in Japan, the Nihon Keizai newspaper reported last week.

The news helped send U.S. steelmakers such as Allegheny Technologies Inc. to their highest in at least seven years.

Posco jumped 2.1 percent to 193,000 won. South Korea's biggest steelmaker said today it may provide half the steel requested by Nissan.

Steel Shortages

``Recent steel shortages in Asia, especially for high-end products, are expected to benefit Posco,'' said Park Sung Mee, an analyst at Good Morning Shinhan Securities Co. in Seoul. She recommends investors buy Posco shares.

JFE, Japan's second-largest steelmaker, gained 1.7 percent to 2,975 yen. Nippon Steel Corp., the largest, advanced 1.2 percent to 255 yen. Both steelmakers are forecasting record profits this fiscal year.

JFE will raise prices next year, on top of an expected increase of 7 percent to 8 percent in the fiscal second-half, Tetsuo Miyazaki, executive vice president of JFE said in an interview in Tokyo earlier this month.

China Steel Corp., Taiwan's biggest steelmaker, climbed 1.4 percent to NT$35.20. The company on Nov. 25 said it's raising prices for customers on the island due to strong demand from electronic appliance makers, automakers and shipbuilders.

The stock was also boosted after its Malaysia unit said it may raise 312.1 million ringgit ($82 million) in an initial share offering.

Shipping Shares

In Japan, the Topix Marine Transport Index was the best performer among the 33 industry groups that make up the Topix.

Mitsui O.S.K., Japan's biggest tanker owner, jumped 4.2 percent to 699 yen. Nippon Yusen K.K., Japan's biggest shipping company, climbed 2.4 percent to 549 yen.

The Baltic Dry Index, which measures the cost of shipping dry-bulk goods, rose 2.4 percent to a record on Nov. 26. The index jumped 8.8 percent last week, the biggest weekly gain in more than four months. It has climbed 19 percent this month.

Demand for shipping space has surged this year, outpacing fleet growth and boosting freight rates to record levels for both dry-bulk ships and oil tankers.

``Shipping companies are in a unique business situation right now,'' said Hiroshi Uchida, who helps manage $17 billion at UFJ Partners Asset Management Co. in Tokyo. ``Rates will continue to climb as demand outstrips fleet growth.''

In Singapore, Neptune Orient Lines Ltd., which operates the world's sixth-largest container fleet, added 0.7 percent to S$3.02. Cosco Pacific Ltd., a port-operating unit of China's largest shipping company, jumped 3.3 percent to HK$14.05.

Hutchinson Jumps

Hong Kong's Hang Seng Index jumped 1.4 percent. Hutchison Whampoa Ltd. gained after Canada's Globe and Mail reported the company's in talks to sell its stake in Husky Energy Inc. to the Chinese government.

Hutchison Whampoa, a company controlled by billionaire Li Ka-shing that owns 35 percent of Calgary-based Husky Energy, jumped 4.2 percent to HK$68.75. Hutchison spokeswoman Nora Yong said the company doesn't comment on ``market rumors.''

The Shanghai Composite Index, which tracks yuan-denominated A shares and foreign-currency B shares, declined for a fifth day, losing 1.1 percent. The benchmark is set for its longest losing streak since the six days to June 10.

Huaneng Power International Inc. led declines by China's indexes after a China National Coal Association official said coal production may drop over the next 16 years. Higher cola prices will boost costs at energy companies.

`Pressure'

Huaneng Power, the largest China power producer listed in Hong Kong, lost 1.4 percent to 7.64 yuan.

``Power stocks are facing increasing pressure now because the advent of winter will worsen the supply of coal,'' said Sun Chao, an analyst with CITIC Securities Co. in Shanghai.

In Australia, the S&P/ASX 200 Index closed at a record for the fourth straight session. Foster's Group Ltd. rose 2.8 percent to A$5.50 after the Australian Financial Review said the nation's biggest brewer and winemaker may buy back as much as A$1 billion ($788 million) of its stock.

Foster's said it hadn't decided the size or timing of a buyback.

To contact the reporters on this story: Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net.

Last Updated: November 29, 2004 01:26 EST