Tronox raises price of soda ash
On July 5, 2017, Tronox (TROX) announced that it’s increasing the price of soda ash by $6 per short ton, applicable to bulk and packaged products. The increase is effective immediately or as the contract allows. Soda ash is a major raw material used in glass, detergents, and other industrial uses.
The impact of the price increase will be more visible in 3Q17. Soda ash is part of TROX’s Alkali segment. The segment reported revenue of $191.0 million in 1Q17, and with the price increase, the segment’s revenue is expected to rise.
Tronox ended last week with a strong performance. The stock closed at $15.55, rising 2.8% for the week ended July 7, 2017. Its peers, including Chemours (CC), Albemarle (ALB), and FMC (FMC), rose 5.7%, 4.2%, and 2.1%, respectively, for the same period. Despite TROX stock rising 2.8%, it was still trading 4.5% below its 100-day moving average, indicating a weakness in the stock. However, on a year-to-date basis, the stock has risen an impressive 51.6%. The consensus analyst target price of $18.50 suggests more upside to the stock. It implies a potential return of 19.0% from the closing price of $15.55 on July 7, 2017. TROX’s RSI (relative strength index) of 57 indicates that the stock is neither overbought nor oversold.
You can indirectly hold TROX by investing in the Van Eck Vectors Rare Earth and Strategic Metals ETF (REMX), which has invested 6.1% in TROX as of July 7, 2017.