Methanex Corporation

Methanex reported Q2 2026 adjusted EBITDA of $577 million and adjusted net income of $300 million, with an average realized price of $529 per tonne and produced sales of approximately 2.2 million tonnes. Adjusted EBITDA included a $12 million accrual for restructuring activities in Trinidad and Tobago. Total equity methanol production was 2.2 million tonnes, slightly below Q1. North America produced a record 1.6 million tonnes across Canada and the U.S., including a quarterly record 1.1 million and 27 thousand tonnes at Geismar; Beaumont produced 180 thousand tonnes and Natgasoline’s equity share was 204 thousand tonnes. The company repaid the remaining $290 million on Term Loan A and ended with more than $380 million of cash. For Q3, management expects an average realized price range of about $460 to $485 per ton based on July and August postings, and said earnings should remain strong but be lower than Q2 due to lower pricing. Full-year 2026 expected equity production is approximately 9 million tonnes.

Richard Sumner framed the quarter as strong operationally and financially, but emphasized an unusually volatile methanol market driven by the Middle East conflict and supply disruptions through the Strait of Hormuz. He said inventory buffers have been drawn down meaningfully, especially in Asia, and that if the conflict persists, demand rationalization may be needed because Middle East supply remains constrained. He also highlighted strategic priorities: safe reliable operations, OCI integration, deleveraging, and eventually modest share repurchases once leverage improves.

Dean Richardson focused on cash conversion, taxes, and capital deployment. He said the quarter included a significant working-capital build of around $150 million, with a large portion sitting in trade receivables, and noted that cash taxes were accrued in the quarter with a modest amount actually paid; the tax guide remains about a 25% rate with roughly 50/50 cash taxes. He also said the difference between annualized adjusted EBITDA and operating cash flow is around $500 million, reflecting lease payments, interest, capital, and cash taxes, and that the company intends to keep deploying cash while options remain open on debt repayment and refinancing.

Analysts pressed management on whether Methanex was capturing less margin as prices fell, and Sumner replied that contract prices lag spot in both directions, with Asia more spot-linked, and that the company remains committed to contract price postings. Questions also focused on why production guidance stayed near 9 million tonnes despite Titan’s idling; management said higher-than-guided output in Egypt and New Zealand should offset the lost volume, and that not all tonnes contribute equally to earnings. There was also debate about buybacks and debt timing, with management saying share repurchases are being considered but that priority remains deleveraging, while the team still has options on the 2027 debt maturity.