DENVER (AP) — Shares of steel manufacturers surged Friday after a JPMorgan analyst forecast a continued rebound in steel prices fueled by higher materials costs and some improvement in demand.

“Given the increased demand, cost pressures and still tight supply situation, we think announced price increases will stick and expect to see more before the spring,” JPMorgan analyst Michael Gambardella wrote in a client note. He raised price targets and earnings estimates for AK Steel Holding Corp., United States Steel Corp. and ArcelorMittal.

Steel producers, who were hit hard with the decline in construction and auto manufacturing among other industries, have announced price hikes for this year that are expected to boost hot-rolled sheet prices to a range of $550 to $580 a ton by February, Gambardella said.

In November and December, hot-rolled sheet prices hovered around $500 a ton, he said.

Furthermore, prices for raw materials used in the manufacture of steel — such as iron ore, metallurgical coal and scrap — all have had “strong gains,” he said.

Scrap prices, for example, have increased 25 percent since mid-November lows and may increase an additional 15 percent due to seasonal supply constraints, stronger exports and low inventory levels at the mills.