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Eastman Chemical Raises Prices of Key Products

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Eastman Chemical raises price of plasticizers

On September 14, 2016, Eastman Chemical (EMN) announced a price increase in several plasticizer products, effective October 1, 2016. Plasticizers are additives that increases the flexibility, or plasticity, of a material while reducing brittleness. Plasticizers are primarily used in the polyvinyl chloride (or PVC) manufacturing process.

According to its press release, Eastman Chemical raised its prices (EMN) on the following plasticizer products:

  • Eastman 168 non-phthalate plasticizer
  • Eastman 168 SG non-phthalate plasticizer
  • Eastman DOP plasticizer
  • Eastman DOA plasticizer
  • Eastman TOTM plasticizer
  • Eastman VersaMax Plus plasticizer

Eastman Chemical increased the price of its plasticizers due to the increase in raw material costs, which would have a negative impact on its cost of goods sold. On the other hand, its revenues should increase and would be reflected in its 4Q16 results.

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Eastman Chemical’s stock price

On September 16, 2016, Eastman Chemical (EMN) closed at $63.74, down 1.5% for the week. Eastman Chemical traded 9% below its 100-day moving average price of $70.05. On a year-to-date basis, the stock has fallen 5.6%.

Investors can hold Eastman Chemical indirectly by investing in the First Trust Materials AlphaDEX ETF (FXZ), which had a weight of 2.5% in EMN on September 16, 2016. The other top holdings of the fund include Westlake Chemical (WLK), Berry Plastics Group (BERY), and Dow Chemical (DOW), with weights of 3.8%, 3.7%, and 3.5%, respectively.

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