Methanex Maintained at Buy at TPH as North American Methanol Prices Rise; Price Target at US$57.00

09:35 AM EDT, 08/29/2024 (MT Newswires) -- Tudor, Pickering, Holt on Thursday maintained its buy rating on the shares of Methanex (MX.TO, MEOH) with a US$57.00 price target on higher North American prices for its methanol production.

"Slightly positive. MEOH's methanol contracts either rose or rolled over for Sep'24, with NAM up +$27 to $722/tonne, a 16y high, while China remained at $380/tonne and Asia Pacific rolled over at $400/tonne. In addition, the Europe contract is up +(Euro)10 to (Euro)535/tonne for Q3'24. These moves are all directionally inline with recent spot pricing trends around the world with NAM and Europe relatively stronger than China and Asia Pacific given the well-documented macroeconomic difficulties China is currently facing amongst a supportive backdrop of stable global demand and supply outages in key areas. Overall, we estimate that MEOH's weighted average contract price is up +$6 m/m in Sep'24 to $510/tonne and up +$14 q/q vs $491 in Q2. Looking forward, new supply is coming from the 1.8mmt MEOH/G3 plant, which is ramping to full rates, and the 1.8mmt Sarawak/Malaysia plant, which is expected to come online by the end of the year. However, MEOH also announced the temporary idling of its New Zealand production (roughly 1.1mmt offline) after negotiating an agreement to deliver its contractual natural gas into the electricity market at margins that are even better than its methanol business. Maintain Buy on MEOH," analyst Matthew Blair wrote.

(MT Newswires covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://www.mtnewswires.com/contact-us)

Price: 61.45, Change: +0.36, Percent Change: +0.59