Celanese increased VAM prices
On December 21, Celanese (CE) increased VAM (vinyl acetate monomer) prices. The price increase is only applicable to Asia outside China. Celanese increased the VAM prices by $50 per metric ton. The price increase is effective immediately or as the contract allows. Celanese didn’t cite any particular reason for the price increase.
Although the price increase is effective immediately, the impact could be positive. The impact is expected to be more visible in the first quarter of 2019. In the third quarter, Celanese’s acetyl segment reported revenues of $1.0 billion—an increase of 17% driven by the increased VAM prices. The price increase is expected to increase Celanese’s revenues in the first quarter of 2019.
Stock price update
Despite continued volatility in the US market, Celanese’s stock price increased 0.25% and closed at $86.89 for the week ending December 21. However, Celanese traded ~18%% below its 100-day day moving average price of $105.90. Celanese’s 100-day moving average price has fallen from the high of $113.64, which indicates weakness in the stock. On a year-to-date basis, the stock has declined 18.9%. In comparison, Eastman Chemical (EMN), LyondellBasell (LYB), and Westlake Chemical (WLK) have fallen 25.35%, 28.40%, and 42.4%, respectively. The fall reflects that Celanese’s decline isn’t as sharp as its peers.
Celanese’s 14-day relative strength index score of 35 indicates that the stock isn’t overbought or oversold.
Investors could hold Celanese indirectly through the Invesco DWA Basic Materials Momentum ETF (PYZ). PYZ had 3.10% exposure to Celanese as of December 21. PYZ fell 5.3% last week.