Methanex Corporation ( MEOH Quick Quote MEOH - Free Report) recently announced that it is expecting its Titan methanol facility in Trinidad to remain idle indefinitely. The facility has an annual operating capacity of 875,000 tons.
Methanex will restructure its operations in Trinidad to support a one-plant operation. The company also plans to reduce its workforce in Trinidad by roughly 60 positions filled by employees and long-term contractors.
Methanex has been unable to reach an agreement for longer-term natural gas deal. With the uncertainty associated with the economy recovery path, the company has decided to reduce costs while still making efforts to secure a longer-term gas supply.
The Atlas methanol facility is underpinned by a separate natural gas supply agreement and is unaffected by the change.
Methanex’s operations in Trinidad are well located to supply global methanol markets and are essential for their global production network. Hence, the company remains committed toward its business in Trinidad and Tobago and hopes to secure a longer-term natural gas agreement for Titan. It is taking the required steps for a smooth restart of the plant once an agreement is reached.
Shares of Methanex have gained 10.5% in the past year compared with 22.5% rise of the
Methanex stated, in its last earnings call, that methanol prices have increased leading into the fourth quarter. The uptick was aided by a strong recovery in methanol demand and reduced industry supply resulting in lower global inventory levels.
Methanex also noted that the path and the pace for global economic recovery and methanol demand is uncertain, considering the impacts of the corona virus pandemic and challenging commodity prices. It is focused on preserving liquidity and improving financial flexibility.
Zacks Rank & Other Key Picks
Methanex currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the basic materials space are
Fortescue Metals Group Limited ( FSUGY Quick Quote FSUGY - Free Report) , BHP Group ( BHP Quick Quote BHP - Free Report) and Impala Platinum Holdings Limited ( IMPUY Quick Quote IMPUY - Free Report) .
Fortescue has a projected earnings growth rate of 73.5% for the current fiscal. The company’s shares have surged around 159% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see
the complete list of today’s Zacks #1 Rank stocks here.
BHP has an expected earnings growth rate of 49.16% for the current fiscal. The company’s shares have gained around 30.2% in the past year. It currently flaunts a Zacks Rank #1.
Impala has an expected earnings growth rate of 131.7% for the current fiscal. The company’s shares have surged around 30.6% in the past year. It currently sports a Zacks Rank #1.
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