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Industrial gas producer and supplier, Praxair Inc. (PX - Analyst Report) announced price increases of industrial, specialty and medical gases for its customers in the United States, Canada, Mexico and Puerto Rico. The revised rates will be applicable to the bulk and packaged gas customers, effective Jan 1, 2014.

Prices of nitrogen, oxygen and carbon dioxide have been increased by up to 12% while argon and hydrogen prices have been raised up to 15%. Facility fees or monthly bulk product charges and cylinder rental rates have gone up by 15% while prices for hardgoods have escalated by 5% and helium up to 20%. Prices of electronic gases have also been raised up to 20%.

Higher raw material costs, investments in infrastructural developments and maintenance of supply/demand balance were the prime factors driving this revision.

It is worth mentioning that a week ago for similar reasons, Praxair’s prime competitor, Air Products & Chemicals Inc. (APD) announced an increase in price for fluorinated gases and other process materials supplied by its Electronics business.

Long-term growth prospects are bright for Praxair especially on the back of growing demand for industrial gases for use in diverse industries, including hydrogen for refining; oxygen for healthcare; and nitrogen and carbon dioxide for oil and gas production. The company’s year-to-date return is roughly 13.3%.

Also, customers’ preference for Praxair’s world class technology, high quality products and gas supply services raises optimism for solid earnings growth, going forward. Currently, we anticipate earnings to grow 11.6% in the next 5 years.  

Praxair Inc. has a market capitalization of $36.8 billion and carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the industry include Asahi Kasei Corporation , Johnson Matthey plc (JMPLY) and E. I. du Pont de Nemours and Company (DD - Analyst Report). While Asahi Kasei and Johnson Matthey carry a Zacks Rank #1 (Strong Buy), E. I. du Pont de Nemours and Company holds a Zacks Rank #2 (Buy).

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