Methanex Corporation (MEOH - Analyst Report) , the world’s largest supplier of methanol, announced that it has restarted its second methanol plant at its Motunui site in New Zealand. According to the company, the plant will raise the site capacity by 650,000 tonnes per year to 1.5 million tonnes per year.
The plant, which will serve the Asian markets, was restarted by Methanex at optimum costs and is expected to generate strong supplies. The increased natural gas supply situation in New Zealand will enable improved production from the Motunui site. Further, the company also plans to restart another plant near the Waitara Valley site.
Methanex, in May 2012, posted earnings of 23 cents per share in the first quarter of 2012, down from 37 cents a year ago. The results missed the Zacks Consensus Estimate of 36 cents. Earnings were impacted by lower sales of Methanex-produced methanol.
Revenues of $666 million exceeded the year-ago revenues of $619 million, a roughly 7.6% increase. Sales surpassed the Zacks Consensus Estimate of $633 million. Sales volumes in the quarter totaled 1.8 million tons, down 2.2% from the year-ago quarter.
Average realized price per ton amounted to $437 in the quarter, almost flat versus the year-ago quarter. Total production in the quarter amounted to 945 thousand tons compared with 801 thousand tons in the prior-year quarter.
Methanex expects strong methanol demand and an upward pressure on prices in the second quarter of 2012. However, the company believes that methanol price will depend on the strength of the global economy, industry operating rates, global energy prices, new supply additions and the strength of global demand.
As part of its strategy to strengthen its position as the global leader in the production and marketing of methanol, Methanex intends to continue pursuing new opportunities to boost its strategic position in the methanol industry.
Methanex faces stiff competition from Celanese Corp. (CE - Analyst Report) and Eastman Chemical Co. (EMN - Analyst Report) . Currently the company retains a Zacks #4 Rank, reflecting a short-term (1 to 3 months) Sell rating.