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Industrial gas giant Air Products & Chemicals Inc. (APD - Analyst Report) declared that it will raise the price of its products and monthly charges for North American merchant customers. The price hike will be effective May 1, 2013, or as per the contracts.

The price increase is expected to be up to 10% for liquid and bulk industrial gas products, which include liquid argon, liquid oxygen, liquid nitrogen, liquid and bulk hydrogen, bulk carbon monoxide, and liquid carbon dioxide. However, some price revisions may be kept out of these ranges depending on some specific situations.

The price hike was attributable to various supply and demand product imbalances, which resulted in higher costs in nearly every aspect of producing and delivering industrial gases. Moreover, Air Products has been affected by higher energy costs from utility companies and higher distribution expenses.

Air Products, which has annual sales of $9.6 billion, offers industrial gases as well as a variety of polymer and performance chemicals and serves technology, energy, industrial and health care customers globally.

Few days ago, Air Products received an LNG heat exchanger order from Malaysian integrated oil and gas company Petroliam Nasional Berhad (PETRONAS) for a major LNG Train 9 project at the Bintulu facility in Malaysia. As per the deal, Air Products’ SplitMR liquefaction process and technology will be supplied to the PETRONAS LNG Train 9 Project.

The PETRONAS LNG Train 9 Project is an extension of an already existing PETRONAS LNG Complex in Bintulu, Sarawak, Malaysia. The project is expected to produce 3.6 million tons per year (MTPY) of LNG. The company targets to start its operations by end of 2015.

Air Products benefits from a diverse customer base, sustained pricing power and cost-reduction measures. New business deals and strategic investments are expected to support its results in fiscal 2013.

However, volume in Air Products’ core Merchant Gases segment is expected remain under pressure partly due to the recessionary conditions in Europe. The electronics business may continue to see weak demand.

Air Products is slated to release its results for second-quarter fiscal 2013 before the market opens on Apr 23.

Air Products currently holds a short-term Zacks Rank #3 (Hold).

Other companies in the chemical industry that are worth considering include Olin Corp. (OLN - Snapshot Report), Eastman Chemical Co. (EMN - Analyst Report) and LyondellBasell Industries NV (LYB - Analyst Report). While Olin retains a Zacks Rank #1 (Strong Buy), both Eastman and LyondellBasell hold a Zacks Rank #2 (Buy).
 

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