Celanese price hikes
On January 24, 2018, Celanese (CE) announced price hikes for propylene-based short-fiber and long-fiber thermoplastic compounds and its polyamide-based polymer grades. The prices were increased across all regions. Below are the price hike details:
- The company increased propylene-based prices to $0.21 per kilogram in the Americas, to 0.10 euros per kilogram in Europe, and $0.10 per kilogram in Asia.
- The company increased polyamide-based grade prices to $0.20 per kilogram in the Americas, to 0.20 euros per kilogram in Europe, and $0.15 per kilogram in Asia.
- The company increased polyamide-based grade prices to $0.30 per kilogram in the Americas, 0.30 euros per kilogram in Europe, and $0.25 per kilogram in Asia.
The price hikes will be effective immediately or as contracts allow. The price increase could have a positive impact on Celanese revenues provided volumes don’t drop. This would be more visible in 1Q18 earnings. In 4Q17, CE’s Advanced Engineered Materials segment reported revenue of $550 million as compared to $364 million in 4Q16.
Stock price update
Celanese stock price fell 1.4% and closed at $111.36 for the week ended January 26, 2018. Despite a fall in the stock price, CE continued to trade 5% above its 100-day moving average price of $106.06, indicating an upward trend in the market. Analysts see further upside in the stock price and provided a target price of $114.40, which is 2.7% above the closing price as of January 26, 2018. However, the latest data indicated that there has been an increase in the short interest as a percentage of outstanding shares. As per the report, the short interest stands at 1.1% as compared to 0.80% at the end of December 2017, which indicates some bearish sentiment prevailing in the stock.
Investors can indirectly hold Celanese by investing in the First Trust Materials AlphaDEX Fund (FXZ), which invests 2.0% of its portfolio in Celanese. The other holdings of the fund include Westlake Chemical (WLK), Huntsman (HUN), and the Chemours Company (CC), which have weights of 3.4%, 3.3%, and 2.7%, respectively, as of January 26, 2018.