Qatar Steel freezes prices to curb inflation - Emirates24|7

Qatar Steel freezes prices to curb inflation



State-controlled Industries Qatar said on Wednesday it will keep its steel prices unchanged until the end of June, though input costs are rising, as part of a government effort to control inflation.

Qatar Steel, a unit of Industries Qatar, will fix its prices at between 3,250 riyals ($893.3; Dh3,287.34) per tonne and QAR3,300 per tonne, about QAR1,000 less than in other Gulf Arab states, it said in a statement on the Qatar bourse website.

"Aligned with the government efforts to curb the current high inflation, Qatar Steel has decided to maintain the steel price in Qatar despite soaring raw materials and steel prices in the GCC countries as well as in the global markets," Qatar Steel Sheikh Nasser bin Hamad al-Thani said in the statement.

"This strategic move is to safeguard the development and high growth in Qatar," Sheikh Nasser said.

Industries Qatar posted its fourth consecutive record profit in the first quarter on higher output and steel prices, it said earlier this month.

Qatar Steel, which aims to almost double production by 2012, contributed to more than a third of sales in 2007, according to financial statements. Qatar Steel Co produced about 1.1 million tonnes of steel billets last year.

Demand for iron and steel in the world's biggest oil-exporting region – where more than $2 trillion (Dh7.36 trillion) of infrastructure projects have been announced or are under construction – could climb more than 30 per cent to 19.7 million tonnes this year, according to the Gulf Organisation for Industrial Consulting.

In Europe, the price of rebar – produced with steel billets – jumped to 570 ($901.70; Dh3,318.26) in February from 440 in December after supplier China raised its export tax on billets.

"After QAR1.9 billion profits in the first quarter, we expect Industries Qatar results to be good this year," said Bashar Issa, investment analyst at Dlala Brokerage and Investment Holding. "But the steel announcement may have an impact on the profit."

Shares of Industries Qatar closed 0.62 per cent on Wednesday and are up more than 37 per cent this month.

Qatar inflation held roughly steady at 13.7 per cent in the fourth quarter, the highest in the Gulf according to the latest government data in the region, as rents and food prices surged.

Qatar is adopting price controls to curb price rises.

The Gulf Arab state introduced a two-year rent freeze at the start of March and has been introducing subsidies on some commodities such as flour as part of efforts to fight inflation. (Reuters)