State-controlled Industries Qatar said on Sunday it would extend a freeze on steel prices until the end of September as the Gulf state battles near-record inflation by tightening price controls.

Qatar Steel, a unit of Industries Qatar, will fix its prices between 3,250 riyals ($892.8) per tonne and 3,300 riyals per tonne in the third quarter, it said in a statement on the Qatar bourse website.

Qatar Steel said in April it would hold steel prices until the end of June -- even though its input costs were rising.

The extension comes after Qatar's Prime Minister, Sheikh Hamad bin Jassim bin Jabr Al-Thani, was quoted by Gulf Times as saying last week that Qatar would freeze the price of steel and cement for three years as it seeks to tackle inflation.

Qatar, the world's biggest exporter of liquefied natural gas, is contending with the Gulf region's steepest price rises, with inflation hitting 14.75 percent in the first quarter, just off the 14.81-percent record a year earlier.

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

Freezing steel prices would hit net revenues, Qatar Steel's general manager was quoted by Gulf Times as saying in April.

Demand for iron and steel in the world's biggest oil-exporting region could climb more than 30 percent to 19.7 million tonnes this year, according to the Gulf Organization for Industrial Consulting.

Like most of its neighbours, Qatar is adopting price controls to curb price rises. The Gulf state introduced a two-year rent freeze at the start of March and has maintained subsidies on some commodities such as flour and diesel. - Reuters