Methanex (MEOH) Announces Restart of Chile IV Methanol Plant
Methanex Corporation MEOH has completed the restart of its Chile IV plant and produced first methanol from the 0.8-million ton plant that has been idle since 2007.
The Argentine Government has also recently granted permits for export of natural gas from Argentina to Chile. Methanex has started receiving natural gas from Argentina.
On Aug 13, Methanex signed natural gas supply agreements for its Chile operations. Notably, the gas agreements will allow the company for a two-plant operation in Chile during summer months in the southern hemisphere and up to a maximum of 75% of a two-plant operation annually till mid-2020. Methanex expects to secure sufficient gas supply without seasonal restrictions to continue its two-plant operation.
Shares of Methanex have gained 59.5% over a year against the industry’s decline of 10.2%.
Strong demand and pricing fundamentals for methanol are contributing to the rally in Methanex’s shares. Demand has been driven by both traditional derivatives and energy-related applications in Asia, particularly China. Per the company, global demand for methanol increased 4% year over year in the second quarter and is expected to remain healthy throughout the year.
Meanwhile, with a committed revolving credit facility, strong balance sheet and healthy cash generation capability, the company believes it is well positioned to meet financial commitments, cash in on opportunities and return excess cash to shareholders through dividends and share repurchases.
Methanex Corporation Price and Consensus
Methanex Corporation Price and Consensus | Methanex Corporation Quote
Zacks Rank & Other Stocks to Consider
Methanex is a Zacks Rank #1 (Strong Buy) stock.
A few other top-ranked companies in the basic materials space are Air Products and Chemicals, Inc. APD, CF Industries Holdings, Inc. CF and Cabot Corporation CBT.
Air Products has an expected long-term earnings growth rate of 13.3% and a Zacks Rank #1. The company’s shares have gained 7.5% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
CF Industries has an expected long-term earnings growth rate of 6% and a Zacks Rank #1. The company’s shares have rallied 57% in the past year.
Cabot has an expected long-term earnings growth rate of 11% and a Zacks Rank #2 (Buy). Its shares have risen 5.8% in a year’s time.
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