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Celanese to Hike Prices of VAM Product in Asia Outside China

Zacks Equity Research

Celanese Corporation CE is set to increase the list and off-list selling prices of Vinyl Acetate Monomer (VAM). The price hike will be implemented with immediate effect for orders shipped or as contracts permit and are incremental to any earlier price increases.

The company will raise VAM prices by $50/MT in Asia outside China.

Celanese is taking appropriate pricing actions amid a volatile pricing environment for raw materials. The company’s strategic measures including operational cost savings through productivity actions and price hike initiatives are likely to provide an impetus to its 2018 earnings.

In the past six months, Celanese has underperformed the industry it belongs to. The stock has lost around 23.5% compared with the industry’s fall of 14.7%.

The chemical maker benefited from gains in its EM and Acetyl Chain units in the third quarter. Higher pricing across these businesses also supported its results.

On third-quarter earnings call, Celanese raised its adjusted earnings per share guidance for the full year to roughly $10.90-$11.10, factoring in strength in Engineered Materials (EM) and Acetyl Chain units. The company expects this momentum in Acetyl Chain and EM to continue during the rest of 2018. The EM segment is expected to maintain the pace of earnings growth with traction from new projects and bolt-on acquisitions.

However, Celanese saw lower pricing in the reported quarter at its Acetate Tow segment due to reduced industry capacity utilization, partly masked by mix and productivity gains.

Celanese Corporation Price and Consensus


Celanese Corporation Price and Consensus | Celanese Corporation Quote


Zacks Rank & Stocks to Consider

Celanese currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the basic materials space are Verso Corporation VRS, The Mosaic Company MOS and Cameco Corporation CCJ.
Verso has an expected earnings growth rate of 570% for the current year and a Zacks Rank #1 (Strong Buy). Shares of the company have rallied 25.9% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Mosaic has an expected earnings growth rate of 75.2% for the ongoing year and a Zacks Rank #2 (Buy). The stock has gained 8.5% in the past year.

Cameco has an expected 66.7% earnings growth rate this year and a Zacks Rank of 2. Its shares have climbed 15.6% in a year’s time.

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