Methanex(US:MEOH)2025-10-30 16:00Financial Data and Key Metrics Changes - The average realized price for methanol in Q3 2025 was $345 per ton, with produced methanol sales of approximately 1.9 million tons, generating adjusted EBITDA of $191 million and adjusted net income of $0.06 per share [5][11] - Adjusted EBITDA increased compared to Q2 2025 primarily due to higher sales of produced product, despite a lower average realized price [5] Business Line Data and Key Metrics Changes - The fully owned Beaumont plant and the 50% owned NAT Gasoline plant produced a combined 482,000 tons of methanol and 92,000 tons of ammonia during Q3 2025 [5] - Methanex production in Q3 was higher compared to Q2, with full contributions from new assets and higher production from Geismar, Medicine Hat, and New Zealand [8] Market Data and Key Metrics Changes - Global methanol demand was relatively flat in Q3 compared to Q2, with methanol to olefins demand in China operating at high rates, reaching approximately 90% by the end of the quarter [6][7] - The fourth quarter European quarterly price for methanol was €535 per ton, a €5 increase from Q3, while North America, Asia Pacific, and China prices for November were posted at $802, $360, and $340 per ton respectively [7] Company Strategy and Development Direction - The company is focused on safely and reliably operating its business and executing its integration plan following the acquisition of new assets [10] - Capital allocation priorities include directing all free cash flow to deleveraging in the near term, with no significant growth capital anticipated over the next few years [11][32] Management's Comments on Operating Environment and Future Outlook - Management expects a meaningful increase in adjusted EBITDA in Q4 2025 compared to Q3, driven by higher sales levels closer to run-rate equity production [11] - The company is optimistic about the methanol market, indicating that supply continues to be constrained and that they are not concerned about placing additional tons in the market [28] Other Important Information - The company has an expected equity production guidance for 2025 of approximately 8 million tons, consisting of 7.8 million equity tons of methanol and 0.2 million tons of ammonia [10] - The integration plan for newly acquired assets is structured over 18 months, focusing on realizing expected benefits from the acquisition [5][33] Q&A Session Summary Question: Relationship with NGC and gas allocation in Trinidad - The company has a contract with NGC for port fees and is in discussions regarding gas availability, with tight gas markets expected to persist [14][15] Question: Recontracting of OCI book - The company increased sales by about 350,000 tons from Q2 to Q3 and is in discussions for recontracting for next year [16][17] Question: Impact of accounting treatment on Q3 EBITDA - The main earnings difference is attributed to a delta of 500,000 to 600,000 tons versus Q3, which is expected to improve in Q4 [20][21] Question: Methanol sales distribution - A large percentage of contracted business is expected to be in North America and Europe, with a diversified customer base [26][27] Question: Global industry utilization rates and demand - Industry operating rates are high, with effective utilization much higher than reported due to idled capacity and geopolitical issues [40][41] Question: Gas purchasing strategy for new assets - The company is currently hedged at around 70% for North American exposure and is opportunistically entering the market for future gas purchases [46][47]