Celanese Backs Domestic Alternative Fuels Act - Analyst Blog
May 16 2013 - 11:40AM
Zacks
Chemical and advanced materials
maker Celanese Corporation (CE) has announced its
support for the Domestic Alternative Fuels Act of 2013 introduced
by Congressman Pete Olson to the U.S. House of Representatives on
May 15.
The bill has been designed to amend section 211(o) of the Clean Air
Act to allow ethanol production from domestic natural gas and help
fuel blenders meet their obligations under the federal Renewable
Fuels Standard (RFS). It is co-sponsored by Representative Jim
Costa and has bipartisan support in the U.S. House of
Representatives.
While endorsing the legislation, Celanese emphasized the necessity
of an energy policy which uses every available source of domestic
energy. It further noted that the bill will promote the use of the
abundant natural resources available in the country, free market
economics and technical innovation to attain America’s critical
energy security goals as well as fuel economic growth and job
creation.
Celanese has developed an advanced technology dubbed “TCX
Technology” that produces fuel and industrial-grade ethanol from
natural gas. This breakthrough technology is built on the company’s
industry-leading acetyl platform and uses basic hydrocarbons as
feedstock instead of agricultural crops.
TCX is ideal for producing ethanol for the fuels market and
applications such as paints, coatings, inks and pharmaceuticals.
Other companies are also developing innovative and advanced
technologies for producing ethanol from non-biomass
feedstocks.
Celanese is among the world’s largest producers of acetyl products
as well as the leading global producer of high-performance
engineered polymers. The company’s strong presence in emerging
markets will enable it to deliver incremental earnings in 2013.
Celanese’s first quarter results, reported on Apr 18, were a mixed
bag with adjusted earnings topping expectations while sales missing
the same. The company expects the challenging economic conditions
to persist throughout 2013. For 2013, Celanese expects earnings
growth on the back of company-specific initiatives and to be
consistent with its long-term growth objective of 12% to 14%.
Celanese is aggressively expanding capacity in the emerging Asian
markets. Its expansion initiatives in China are expected to support
earnings growth. We are also upbeat about the prospect of its TCX
technology.
However, Celanese is witnessing weak demand and pricing in its core
acetyl business. The challenging economic conditions in Europe and
sluggish growth in Asia may impact the company’s results.
Celanese currently carries a short-term (1 to 3 months) Zacks Rank
#1 (Strong Buy).
Other companies in the chemical industry that are worth considering
include Shin-Etsu Chemical Co., Ltd. (SHECY),
Methanex Corp. (MEOH) and FMC
Corp. (FMC). While both Shin-Etsu Chemical and Methanex
retain a Zacks Rank #1 (Strong Buy), FMC holds a Zacks Rank #2
(Buy).
CELANESE CP-A (CE): Free Stock Analysis Report
FMC CORP (FMC): Free Stock Analysis Report
METHANEX CORP (MEOH): Free Stock Analysis Report
SHIN-ETSU CHEM (SHECY): Get Free Report
To read this article on Zacks.com click here.
Zacks Investment Research
Shin Etsu Chemical (PK) (USOTC:SHECY)
Historical Stock Chart
From Jul 2024 to Aug 2024
Shin Etsu Chemical (PK) (USOTC:SHECY)
Historical Stock Chart
From Aug 2023 to Aug 2024