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Celanese (CE) to Hike Price of Vinyl Acetate Based Emulsions

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Chemical and advanced materials maker, Celanese Corporation (CE - Free Report) stated that it will increase the price of Vinyl acetate homopolymer and vinyl acrylic emulsions by up to 3 cents per wet pound. The price for Vinyl acetate ethylene (VAE) emulsions will increase by up to 5 cents per wet pound. The price hike will be effective Nov 15, 2016, or as contracts permit.

This price hike affects all applications including, but not limited to, adhesives, paints and coatings, building and construction, nonwovens, glass fiber, carpet, paper and textiles.

Recently, Celanese also raised the list and off-list selling prices of acetic acid by RMB 200/MT in China in view of recent market conditions. The price hike will be effective immediately or as contracts permit.

Celanese, in its second-quarter 2016 earnings call, noted that recent events have added further uncertainties to economic growth expectations. However, it sees a relatively stable economic landscape across the U.S. and Europe for the rest of 2016.

The company retained its expectations of 8–10% growth in adjusted earnings per share for 2016, considering the benefits of productivity actions and operational excellence as well as strength of commercial models.

Celanese’s strategic measures including productivity and efficiency improvement actions should lend support to its earnings in 2016. The company should also gain from capacity expansion and growth initiatives in the emerging regions, including Asia. Additionally, Celanese continues to generate strong cash flows and remains focused on returning value to its shareholders.

However, Celanese is exposed to pricing pressure and is still witnessing soft acetyl demand in China given the sluggish economic conditions. Acetyl intermediates margins are anticipated to remain strained in the near term.

Celanese is a Zacks Rank #3 (Hold) stock.

Stocks to Consider

Some better-ranked companies in the chemical space include The Chemours Company (CC - Free Report) and Cabot Corp. (CBT - Free Report) and The Dow Chemical Company (DOW - Free Report) .

Chemours has an expected earnings growth of around 20.3% for the current year. The company sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Cabot, currently carries a Zacks Rank #2 (Buy) and has an expected earnings growth of roughly 12.1% for the current year.

Dow has an expected earnings growth of around 2.9% for the current year. The stock carries a Zacks Rank #2.

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