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Methanex hits record earnings amid Middle East chaos
The world's largest methanol producer posted landmark Q2 results, but faces a sharp pricing cliff ahead.
In brief
The world's largest methanol producer posted landmark Q2 results, but faces a sharp pricing cliff ahead. Methanex delivered record profits from geopolitical supply disruptions, but management warns of a 12-18% price decline in Q3 that will materially shrink earnings. Originally reported by Alphastreet - Earnings…
Record quarter fueled by geopolitical chaos
Methanex posted $577 million adjusted EBITDA and $3.87 earnings per share in Q2 2026, a 299% year-over-year jump. Methanol prices spiked to $529 per tonne due to Middle East supply disruptions.
“delivered record Adjusted EBITDA largely due to higher pricing as a result of the significant loss of industry supply”
Production volumes surge 36.5% year-over-year
Output jumped to 2.2 million tonnes in Q2, driven by newly integrated OCI Global facilities and record Geismar production of 1 million tonnes. The company maintained full-year guidance of 9 million tonnes.
Revenues nearly doubled to $1.4 billion
Total revenues climbed 75.1% year-over-year as higher pricing and increased volumes combined. Sales volume reached 2.6 million tonnes, with purchased methanol representing 15.8% of total sales.
Cash flow hit $439 million in Q2
Operating cash flow surged from $277 million in Q2 2025, enabling Methanex to retire its $290 million Term Loan A and announce a $300 million partial redemption of 2027 notes.
$115 million impairment signals asset stress
A non-cash impairment charge on Titan and Atlas facilities in Trinidad, Tobago, and New Zealand highlighted operational vulnerabilities. These regional assets face production disruptions and gas supply constraints.
Q3 pricing expected to drop 12-18%
Management guided for average realized prices of $460 to $485 per tonne in Q3, down from $529 in Q2. The company explicitly warned that adjusted EBITDA will contract materially despite stable production.
“we are expecting lower Adjusted EBITDA in the third quarter”
Earnings miss despite record results
Methanex reported $3.87 adjusted EPS, missing the Zacks consensus estimate of $4.00 by 2%. The miss occurred despite record profitability, suggesting market expectations were even higher.
OCI synergies delayed until 2027
The June 2025 OCI Global acquisition is delivering production gains, but cost synergies are not expected until 2027. Capacity constraints will persist through the end of 2026, creating execution risk.
The investment thesis in three tensions
Methanex faces a complex trade-off: record earnings from temporary supply disruptions, operational fragility in key international facilities, and delayed synergies from the OCI acquisition. Pricing normalization poses the biggest near-term risk.
The main idea
Methanex delivered record profits from geopolitical supply disruptions, but management warns of a 12-18% price decline in Q3 that will materially shrink earnings.
