Celanese and Ibn Sina joint venture update
On January 2, 2018, Celanese (CE) announced that its 50,000-metric-ton polyacetal facility construction with Ibn Sina in Jubail Industrial City, Saudi Arabia, is commercially operational. This was achieved after CE conducted performance runs for all polyacetal grades at full production capacity.
Polyacetal is used in the automobile, electronics, mechanical, construction, and many other industries. This facility uses methanol as feedstock. As a result of this facility becoming commercially operational, CE’s economic interest in it will increase to 32.5% from the current 25.0%, which will likely help CE financially. The Ibn Sina joint venture was started in 1981 between SABIC and CTE, jointly owned by subsidiaries of Celanese and Duke Energy (DUK). The joint venture could help CE to increase its presence in the region and expand its operations in this region.
Celanese’s stock update
Celanese closed at $108.25 and gained 1.1% for the week ended January 5, 2018. CE underperformed the First Trust Materials AlphaDEX Fund (FXZ), which rose 3.9% for the same period. The fund invests 1.9% of its portfolio in Celanese.
Celanese’s stock price rise has resulted in the stock trading 3.9% above the 100-day moving average price of $104.15, indicating an upward trend in the stock. In 2017, CE gained 38.5%. However, analysts continue to be bullish on the stock and have recommended a target price of $112.00, which is 3.5% above the closing price as of January 5, 2018. CE’s 14-day relative strength index of 57 indicates that the stock is neither overbought nor oversold.
Investors looking for indirect exposure to CE can invest in FXZ. The fund also provides exposure to Westlake Chemical (WLK) and Cabot (CBT), which have weights of 4.0% and 3.5%, respectively, as of January 5, 2018.