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U.S. Silica Hikes Prices of Industrial and Specialty Products


U.S. Silica Holdings, Inc.’s SLCA Industrial and Specialty Products business increased prices for most of its products such as non-contracted silica sand, paints, coatings, cool roof granule, aplite and specialty products used primarily in glass, foundry, recreation, chemical, roofing, building products and other applications.

The price increase will be in the band of 4-14%, depending on the grade and product and is effective for shipments after Jan 1.

Per the company, the move will offset rising costs of production and also supports its continued investment in upgrading capacity to meet its growing products demand.

U.S. Silica’s shares have moved up 12.5% over a year, slightly underperforming the industry’s 13% gain.

In November 2017, U.S. Silica stated that it expects capital expenditures for 2017 to be at the high end of its earlier announced guidance range of around $375 million. For the fourth quarter, the company sees rising sand volumes and continued pricing upside in the Oil & Gas segment.

U.S. Silica remains focused on pursuing acquisitions of complementary businesses or assets. The purchase of logistics solutions provider, Sandbox Enterprises enabled U.S. Silica to offer customers significantly improved transportation and operating efficiencies and meaningful cost savings relative to the existing delivery systems. Growth of Sandbox business is driving sales and margins in the Oil and Gas unit and is expected to make a major contribution in 2017.

Also, U.S. Silica continues to evaluate opportunities for greenfield expansions in the fast-growing Permian basin. The company has started the construction of a new frac sand mine and plant in West Texas to cater the Permian basin. It has also signed five new long-term supply deals for Permian and Northern White local frac sand during third-quarter 2017.

Zacks Rank & Stocks to Consider

U.S. Silica currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Methanex Corporation MEOH, The Mosaic Company MOS and Steel Dynamics, Inc. STLD, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has an expected long-term earnings growth rate of 15%. Its shares have soared 26.3% over the last six months.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have moved up 20.6% over the last six months.

Mosaic has an expected long-term earnings growth rate of 9.5%. Its shares have rallied 17.1% over the past six months.

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