Methanex's Q2 2025: Unraveling Contradictions in Gas Supply, Deleveraging, and Sanctions Impact

Gas supply in New Zealand, deleveraging and share repurchase priorities, New Zealand gas availability and production, OCI acquisition and hedging strategy, and impact of sanctions on methanol trade are the key contradictions discussed in Methanex's latest 2025Q2 earnings call.



Earnings and Market Conditions:
- Methanex reported adjusted EBITDA of $183 million and adjusted net income of $0.97 per share for Q2 2025, with a produced sales volume of approximately 1.5 million tons.
- The adjusted EBITDA was lower compared to the first quarter of 2025, primarily due to a lower average realized price.
- Global methanol demand increased by approximately 4% in Q2 compared to Q1, driven by higher demand in China across multiple applications.

Production and Operational Updates:
- Methanex's production in Q2 was similar to Q1, with increased production in Geismar and Trinidad offset by lower production due to gas constraints in Chile, New Zealand, and Egypt.
- The acquisition of OCI's methanol business was successfully closed, with integration proceeding as planned, leading to safe and reliable operations and meeting customer commitments.
- Both the 100% owned Beaumont facility and the 50% owned gasoline facility operated at full rates post-acquisition.

Strategic Acquisition Impact:
- The acquisition of OCI's methanol business added two world-scale methanol facilities in Beaumont, Texas, enhancing Methanex's production portfolio with access to stable and economic natural gas feedstock.
- For the OCI acquisition, Methanex projects post-acquisition run rate EBITDA of $1.075 billion, including synergies, under the assumption of $3.50 per gallon ethanol price and $3.50 per MMBtu natural gas price.

Financial Position and Priorities:
- Methanex ended Q2 with $485 million in cash and access to an undrawn revolving credit facility of $600 million.
- The company's priority for the second half of 2025 is to safely operate the business, integrate new assets, and direct free cash flow to deleveraging through the repayment of the Term Loan A facility.
- No significant growth capital is anticipated over the next few years, focusing on maintaining a strong balance sheet and financial flexibility.