Methanex Expanding Too Far?

Methanex Aggressively Expanding - Maybe Too Aggressively

Reports have surfaced that Methanex (MEOH - Analyst Report) is interesting in pursuing a $1 billion methanol plant expansion in Southern Vietnam. (Where are the funds coming from? I guess the credit crisis has not hit Canada yet.) It is in the oil and gas hub of Ba Ria Vung Tau.

This new plant would have capacity of 1.6 million tones, and would expand MEOH’s capacity by 25%. (Where is all this demand growth coming from?). Methanol prices have fallen due to weakening global economies. The timing just does not sound right. Cancel this project.