Celanese increases polymer prices
On February 14, 2017, Celanese (CE) raised its selling price for LDPE (low-density polyethylene) resin polymers by $0.06 per pound, effective March 1, 2017. The price increase will apply to North and South America. In fiscal 2016, North and South America accounted for $548.0 million, representing 38.0% of Celanese’s total revenue.
LPDE polymer is reported under Celanese’s Industrial Specialties segment. The price increase will be reflected in 1Q17 and could turn out to be positive for the segment. In fiscal 2016, lower prices had an adverse impact on the segment’s revenue. The rise in polymer prices could help reduce the negative impact of those lower prices.
Celanese stock for the week
For the week ended February 17, 2017, Celanese stock closed at an all-time high of $89.64 on a closing price basis and rose 1.6% for the week. It was trading 14.9% above the 100-day moving average of $78, indicating an upward trend in the stock.
On a year-to-date basis, Celanese stock has risen 13.8%. Celanese’s 14-day RSI (relative strength index) of 71 indicates that the stock has temporarily moved into an overbought situation. An RSI of 70 or above indicates that a stock is overbought, and an RSI of 30 or below suggests that a stock is oversold.
Analysts have set Celanese’s 12-month target price at $95.50, implying a potential return of 6.5% from the closing price of $89.64 on February 17, 2017. Celanese underperformed the PowerShares DWA Basic Materials Momentum ETF (PYZ) and rose 1.8% for the week ended February 17, 2017. The top holdings of the fund include Cliffs Natural Resources (CLF), NewMarket (NEU), and Steel Dynamics (STLD), with weights of 4.6%, 3.6%, and 3.5%, respectively, as of February 17, 2017.