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Weekly Update: Chemical Companies, Week Ended September 22, 2017

PART:
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Part 7
Weekly Update: Chemical Companies, Week Ended September 22, 2017 PART 7 OF 14

Celanese Has Round of Price Hikes for Acetyl Intermediates

Celanese hikes prices of acetyl intermediates

On September 21, 2017, Celanese (CE) announced that it is hiking the prices of some of its acetyl intermediates products. The price hike will be effective October 1, 2017, or as the contract allows, with the exception of ethyl acetate for which the price increase will be immediate. The last time CE hiked the price of acetyl intermediates was in August. The price hikes will have a major impact in North America and South America.

Celanese Has Round of Price Hikes for Acetyl Intermediates

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Below are the price hikes for acetyl intermediates:

  • MIBK (methyl isobutyl ketone) and MIBC (methyl isobutyl carbinol) prices will increase $0.08 per pound in North and South America.
  • Formaldehyde solution 50% prices will increase $0.02 per pound in North America and South America.
  • Formaldehyde solution 37% prices will increase $0.015 per pound in North America and South America.
  • Paraformaldehyde 91%–93% prices will increase $0.035 per pound in North America and South America.
  • Ethyl acetate prices will increase $0.05 per pound in the United States and Canada and $110 per metric ton in Mexico and South America.

The impact of these price hikes will be reflected in the company’s 4Q17 earnings and could drive up CE’s revenue, provided the volumes don’t fall. Celanese didn’t give any reason for the price hikes.

Reviewing Celanese stock

Celanese stock rose 4.1% in the week ended September 22, 2017, and closed at $104.19. As a result, the stock is trading 10.8% above the 100-day moving average price of $94, indicating a prevailing upward trend in the stock. CE’s 14-day relative strength index of 74 indicates that the stock has moved into an overbought situation temporarily, and profit booking might come into the picture. CE has risen 31.0% on a year-to-date basis. It’s trading close to analysts’ consensus target price of $104.71.

Investors can indirectly hold CE by investing in the First Trust Materials AlphaDEX ETF (FXZ), which has invested 1.9% of its portfolio in Celanese. The other holdings of the fund include Westlake Chemical (WLK), LyondellBasell (LYB), and Huntsman (HUN) with weights of 3.9%, 2.9%, and 2.8%, respectively, as of September 22, 2017.

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