W.R. Grace to Hike Prices for FCC Catalysts Beginning in 2018



W.R. Grace announces a product price hike

On October 25, W.R. Grace (GRA) announced a price hike for its Fluid Catalytic Cracking (FCC). The price hike should be in the range of 3% to 9%, according to product type and on contract terms. The price increase should be effective from January 1, 2018.

GRA’s FCC helps to process more complex crudes and help refining companies improve profitability. GRA has been witnessing good demand for FCC. GRA claimed the increase in the price hike of FCC is mainly due to increased raw material costs. Tom Petti, GRA’s President of Refining Technologies, said, “Our custom product technologies and technical support have improved many refineries’ financial results by more than a dollar per barrel versus the alternative. We remain focused on continued improvements in product performance and providing high levels of technical service that, together, improve our customers’ financial results.”

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GRA’s stock performance

GRA stock rose 6.30% and closed at $76.01 for the week ended October 27. The stock price rose primarily due to better-than-expected earnings in 3Q17. The increase in stock price resulted in the turnaround trend in the 100-day moving average price. The stock traded 5.70% above the 100-day moving average price of $71.94. On a year-to-date basis, the stock has returned 12.40%. GRA’s relative strength index of 69 indicates that the stock is moving toward an overbought position.

Investors looking to hold GRA indirectly can invest in the iShares U.S. Basic Materials ETF (IYM), which has invested 0.80% of its holdings in GRA. The other holdings of the fund include Monsanto (MON), Praxair (PX), and Air Products and Chemicals (APD) that have weights of 8.0%, 6.10%, and 5.0%, respectively, as of October 27.


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