Chemical and advanced materials maker, Celanese Corporation CE announced a hike in the list and off-list selling prices of Vinyl Acetate Monomer in Asia outside China by $60 per metric ton (MT). The increase will add to any previous hikes that were announced but not implemented. The increase will be effective immediately, or as contracts permit.
Last month, the company had announced a hike in the list and off-list selling prices of acetic acid in Asia in response to the rapid rise and sustained volatility in global methanol prices. The prices of acetic acid were increased by RMB300 per metric ton in China and by $40 per metric ton in Asia outside China.
Of late, Celanese has been increasing the prices of many of its raw materials to combat the adverse effects of market volatility. Celanese is exposed to raw material supply issues and cost pressures. The company is still witnessing weak acetyl demand in China and Europe due to sluggish economic conditions. It also faces headwinds associated with the expiry of a methanol contract in mid-2015.
However, Celanese remains focused on reducing costs and running its plants more efficiently amid operating uncertainty. It is aggressively expanding its capacity in the emerging Asian markets. The company’s expansion initiatives in China are also expected to support earnings growth. Celanese’s integrated chemical complex in Nanjing, China, serves as a base for expansion in Asia, supporting the region's increasing demand.
Celanese’s strong presence in emerging markets will likely help it to deliver incremental earnings in 2015. Earnings are expected to be driven by company-specific initiatives, which include product innovation and enhancement of efficiencies through productivity. The company expects its business strength to offset the volatility in the macro environment in 2015.
Celanese currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the diversified chemical space include Innospec Inc. IOSP Marrone Bio Innovations, Inc. MBII and Stepan Company SCL. While Innospec sports a Zacks Rank #1 (Strong Buy), Marrone Bio and Stepan carry a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment