Air Products and Chemicals increases gas prices
On December 17, 2018, Air Products and Chemicals (APD) announced that it would increase the prices of bulk and industrial gases. For now, the price increase will only occur in North America. The price hike will be effective on January 1, 2019. The price increase includes product price, monthly service charges, and surcharges for merchant customers.
The details of the price increases are as follows:
- Liquid argon will rise 20%.
- Liquid nitrogen, liquid oxygen, liquid carbon dioxide, and monthly service charges will rise up to 10%.
- Helium prices will be increased based on supply/demand along with cost situations and could be customer specific.
APD cited an increase in sourcing costs and an increase in production and delivery costs as the primary reasons for the price increase. The price increase will be more visible and could have a positive impact on APD’s fiscal second quarter of 2019. APD’s Industrial Gases Americas segment reported revenue of $987 million in its fourth quarter of fiscal 2018.
The overall weakness in the market also impacted APD. APD’s stock price declined marginally by 0.25% to close at $155.00. In contrast, its peer Linde (LIN) gained marginally by 0.18% to close at $157.22.
Investors can indirectly hold APD by investing in the iShares U.S. Basic Materials ETF (IYM), which has invested 5.95% of its portfolio in APD. The fund also provides exposure to DowDuPont (DWDP) and LyondellBasell (LYB) with weights of 21.2% and 4.6%, respectively.