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An Update on Celanese’s Latest Product Price Hikes

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Celanese increases product prices

On April 10, 2018, Celanese (CE) announced price hikes for several products. These price hikes are effective immediately or according to the respective contracts. This price increase is expected to impact the Asia Outside China region. Below are the details of the price increases:

  • Butyl acetate prices are expected to increase $50.00 per metric ton in Asia Outside China.
  • Ethyl acetate prices are expected to increase $50.00 per metric ton in Asia Outside China.
  • Vinyl acetate monomer (or VAM) prices are expected to see a price hike of $100.00 per metric ton in Asia Outside China.
  • Celanese is expected to increase the price of Ateva EVA polymers by $0.05 per pound in the Americas. This increase is expected to be effective on May 1 or as the contract allows.

These price hikes are expected to improve Celanese’s (CE) revenues assuming that these volumes don’t decline. The impact of the price hikes should be visible in 2Q18.

In 4Q17, CE reported revenues of ~$1.6 billion, which is an increase of 21.5% on a year-over-year basis. This trend is expected to continue, as CE has implemented more price hikes since the beginning of 2018.

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Stock price update

Celanese (CE) stock gained 4.2% and closed at $104.16 for the week ended April 13, 2018. Despite these strong gains, Celanese traded 1.2% below its 100-day moving average price of $105.44. On a year-to-date basis, the stock has declined 2.7%.

Among CE’s peers, LyondellBasell (LYB) fell 6.6%. Eastman Chemical (EMN) and Westlake Chemical (WLK) gained 13.8% and 2.0%, respectively. Celanese’s 14-day relative strength index (or RSI) of 54 shows that the stock isn’t overbought or oversold.

Investors could hold Celanese indirectly by investing in the First Trust Materials AlphaDEX Fund (FXZ). FXZ invested 2.1% of its portfolio in Celanese as of April 13, 2018. FXZ gained 2.3% for the week.

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