Industries Qatar set to keep the throttle open

Industries Qatar, a company which produces MTBE which is an additive to petrol is expected to do well as its peers shut down for maintenance in coming months analysts said. The company is expected to release its financial statements for the fourth quarter on Feb 28.

As many of its top competitors take breaks for maintenance, Industries Qatar looks to keep churning ahead. The petrochemicals company, which produces the petrol additive MTBE as well as fertiliser and steel, should also benefit from increased demand in Asia for petrol additives, analysts said.

Shares of the petrochemicals giant were up 0.8 per cent yesterday to 146.20 Qatari rials each. A week-long holiday for the Lunar New Year in China, which has just ended, meant many Chinese petrochemicals plants were closed. China's import requirements are expected to surge as the country's industries start up again after the holidays. In addition, MTBE is expected to be in short supply in South Korea as LG Chem, a producer based in Daesan, has scheduled its plant, which produces 760,000 tonnes per year, to shut down for a month from March 15 for expansion.

"This news is positive for Industries Qatar, as methanol and MTBE together account for 10 per cent of [the company's] earnings," the brokerage Alembic HC Securities said in a note to clients yesterday. "Industries Qatar had taken a shutdown at its methanol and MTBE facility last year, with the plant operating at full capacity now."

Industries Qatar is expected to report its fourth-quarter results on February 28. They are expected to show its strongest set of quarterly earnings since the third quarter of 2008, driven by an increase in fertiliser and steel prices in the quarter, said Scott Darling, an analyst at Nomura in Dubai.

Investors will also be watching closely for details of a five-year business plan the company has said it would release along with its earnings. Analysts expect Industries Qatar to focus on expanding its regional steel footprint.

Meanwhile, Saudi Basic Industries Corporation, known as Sabic, is scheduled to take its plant in Jubail, which produces 700,000 tonnes per year, offline next month. Sabic had shut two other units producing MTBE from December to early this month. It is not clear if those plants have yet restarted.