Celanese Wants to Increase Its Stake in the IBN-SINA Joint Venture



Celanese expansion

On June 8, 2017, Celanese (CE) provided an update related to the 50,000 metric ton polyacetal manufacturing facility in Jubail Industrial City, Saudi Arabia. Ibn Sina is a joint venture between SABIC and CTE. CTE is a subsidiary of Celanese and Duke Energy (DUK). The new facility is in the testing phase and is expected to go commercial in 3Q17.

Once the facility is fully operational, Celanese’s share in IBN Sina will increase from 25% to 32.5%, which should increase Celanese’s financial benefits starting in 4Q17. Currently, a subsidiary of Duke Energy holds 25%, while the remaining 50% is held by SABIC.

The demand for polyacetal is mainly in automobile and electronics industries along with the mechanical and construction space.

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Celanese stock last week

For the week ending June 9, 2017, Celanese stock closed at $90.12 and rose 2.4% for the week. Gains in Celanese’s stock price widened the gap on its 100-day moving average price. Celanese traded 2.6% above its 100-day moving average of $87.84. On a year-to-date basis, Celanese has risen 15.5%. Analysts expect the company’s 12-month target price to be at $97.37—a potential return of 9.0% from the closing price as of June 9, 2017.

Celanese’s 14-day RSI (relative strength index) of 63 indicates that the stock isn’t overbought or oversold. An RSI of 70 or above indicates that a stock is overbought, while a score of 30 or below suggests that a stock is oversold.

For the week ending June 9, 2017, Celanese outperformed the PowerShares DWA Basic Materials Momentum ETF (PYZ), which rose 1.40%. PYZ holds 2.8% of its portfolio in Celanese. The fund’s other top holdings include Chemours (CC), FMC (FMC), and Air Products & Chemicals (APD) with weights of 5.7%, 5.5%, and 4.0%, respectively, as of June 9, 2017.


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