On March 15, 2017, Eastman Chemical (EMN) announced an increase in the prices of ketones and plasticizers. The company will increase ketone prices by $0.11 per kilogram and plasticizer prices by $0.09–$0.11 per kilogram. EMN will increase ketone prices in North America and Latin America and plasticizer prices in North America.
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The price hikes were mainly driven by the increase in raw material costs. The price increase will be effective from April 1, 2017, or as contracts allow. The price hike could impact EMN’s revenue positively in 2Q17 provided the volumes aren’t affected adversely. However, since the price rise was driven by the increase in raw material prices, we can also expect an increase in the cost of goods sold as well.
For the week ended March 17, 2017, EMN closed at $79.17 and rose 2% for the week. EMN’s stock price traded 7.5% above the 100-day moving average price of $76.50, indicating an upward trend in the stock. On a year-to-date basis, EMN has moved up 5.3%. EMN’s 14-day relative strength index (or RSI) of 52 indicates that the stock is neither overbought nor oversold. An RSI of 70 indicates that the stock is overbought and a score of 30 suggests that the stock is oversold. EMN’s 52-week low is $62.70, and its 52-week high is $82.10.
EMN underperformed the ProShares Ultra Basic Materials ETF (UYM), which rose 3.1% for the week ended March 17, 2017. UYM invests 1.4% of its portfolio in Eastman Chemical. The top holdings of the fund include Dow Chemical (DOW), DuPont (DD), and Monsanto (MON), which have weights of 8.5%, 8.4%, and 5.9%, respectively, as of March 17, 2017.