Effective April 1, 2011, specialty material company Celanese Corporation (CE) will increase the price of all emulsions sold in the Americas.
Prices for vinyl acetate homopolymers will be up by 3 cents per pound, vinyl acetate ethylene (VAE) emulsions by 3 cents per pound, vinyl acrylic emulsions by 5 cents per pound and pure acrylic emulsions by 9 cents per pound.
The increase was driven by continued price increases in raw materials, particularly in the propylene/acrylic monomer chain, as well as increased transportation costs, particularly in North America.
Earlier, subsidiary Celanese EVA Performance Polymers Inc. increased the price of all grades of Ateva Ethylene Vinyl Acetate (EVA) by 8 cents per pound and all grades of LDPE by 6 cents per pound.
Prior to that, Celanese had announced that it will expand EVA capacity by up to 15% in the second half of 2011 at its Edmonton manufacturing facility, driven by strong growth in strategic and high-value segments.
With Celanese’s unique technology advantage, which allows it to produce a wide range of high value added EVA products, the company is well positioned to satisfy the needs of new high-growth applications.
China is the fastest growing EVA market increase in the photovoltaic cell industry in China and strong demand for EVA in other parts of Asia has led to an increase in global EVA production.
Recently, Celanese reported that its fourth quarter of 2010 exceeded the Zacks Consensus Estimate. Encouraged by the strength of its 2010 performance, its confidence in its earnings growth programs and its expectations for a continued, modest global economic recovery, the company raised its outlook for full-year 2011. The company now expects its full-year 2011 adjusted earnings per share to be at least up by 60 cents and operating EBITDA to be at least $150 million higher than the 2010 results.
Celanese is one of the world’s largest producers of acetyl products as well as a leading global producer of high-performance engineered polymers. The company’s earnings outlook has been improving, driven by the strong performance in the Advanced Engineered Materials business.
However, Celanese is exposed to volatile raw material (natural gas, ethylene and methanol) prices used in the production of basic chemicals in the Acetyl Intermediates segment, principally formaldehyde, acetic acid and vinyl acetate monomer.
The company also faces stiff competition from larger peers, E.I. DuPont de Nemours and Co. (DD) and The Dow Chemical Co. (DOW) in the Advanced Engineered Material Segment as well as in the Industrial Specialties segment. Celanese’s balance sheet leverage is also relatively high, which limits its financial flexibility.
Currently, Celanese holds a short-term Zacks #2 Rank over the next one-to-three months, and a long-term Neutral recommendation (6 months and higher) on the stock.
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