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Methanex (MEOH) to Temporary Idle New Zealand Operations
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Methanex Corporation (MEOH - Free Report) stated that it has entered into short-term commercial arrangements to deliver its contractual natural gas into the New Zealand electricity market. As a result, it will temporarily idle its manufacturing operations in New Zealand until October 2024.
These commercial arrangements are likely to have a positive impact on Methanex's earnings in the third and fourth quarters of 2024, with after-tax profits expected to significantly exceed the margin lost on New Zealand methanol production offered to customers. The commercial arrangements are designed to give Methanex a base price for each unit of gas delivered, with additional incremental value shared by the parties based on electricity pricing over the period.
New Zealand's energy balances are currently severely stretched as a result of seasonally high demand, low hydro levels and a considerably lower gas supply in 2024 than in prior years. The company has been working closely with energy providers, other gas consumers and the New Zealand government to see how they might contribute to the solution.
These agreements will play a vital role in supporting the energy sector, and the company is making the necessary adjustments to its global supply chain to ensure that its customers continue to get methanol supply security. The company has natural gas contracts in New Zealand until 2029 and remains committed to working with all parties involved to improve the country's structural energy balances.
Shares of Methanex have lost 2.7% over the past year compared with a 9.9% decline of its industry.
Image Source: Zacks Investment Research
Methanex, on its second-quarter call, said that it expects production for 2024 to be around 7 million tons. Quarterly production may vary due to gas availability in Chile and New Zealand, start-up of the G3 plant, turnarounds, unforeseen outages and unanticipated events.
For the third quarter, the company anticipates decreased earnings due to lower production from Chile and New Zealand, as well as G3 accumulating inventory. The company's posted pricing for July and August indicate an average realized price range of $350 to $360 per ton for these months.
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) .
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.9%. The company's shares have soared 136.9% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Eldorado’s current year earnings is pegged at $1.32 per share, indicating a year-over-year rise of 131.6%. The Zacks Consensus Estimate for EGO's current-year earnings has been going up in the past 30 days. EGO, a Zacks Rank #1 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 430.3%. The company's shares have rallied roughly 87.6% in the past year.
Agnico Eagle Mines currently carries a Zacks Rank #2 (Buy). AEM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. The company's shares have soared 59.5% in the past year.
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Methanex (MEOH) to Temporary Idle New Zealand Operations
Methanex Corporation (MEOH - Free Report) stated that it has entered into short-term commercial arrangements to deliver its contractual natural gas into the New Zealand electricity market. As a result, it will temporarily idle its manufacturing operations in New Zealand until October 2024.
These commercial arrangements are likely to have a positive impact on Methanex's earnings in the third and fourth quarters of 2024, with after-tax profits expected to significantly exceed the margin lost on New Zealand methanol production offered to customers. The commercial arrangements are designed to give Methanex a base price for each unit of gas delivered, with additional incremental value shared by the parties based on electricity pricing over the period.
New Zealand's energy balances are currently severely stretched as a result of seasonally high demand, low hydro levels and a considerably lower gas supply in 2024 than in prior years. The company has been working closely with energy providers, other gas consumers and the New Zealand government to see how they might contribute to the solution.
These agreements will play a vital role in supporting the energy sector, and the company is making the necessary adjustments to its global supply chain to ensure that its customers continue to get methanol supply security. The company has natural gas contracts in New Zealand until 2029 and remains committed to working with all parties involved to improve the country's structural energy balances.
Shares of Methanex have lost 2.7% over the past year compared with a 9.9% decline of its industry.
Image Source: Zacks Investment Research
Methanex, on its second-quarter call, said that it expects production for 2024 to be around 7 million tons. Quarterly production may vary due to gas availability in Chile and New Zealand, start-up of the G3 plant, turnarounds, unforeseen outages and unanticipated events.
For the third quarter, the company anticipates decreased earnings due to lower production from Chile and New Zealand, as well as G3 accumulating inventory. The company's posted pricing for July and August indicate an average realized price range of $350 to $360 per ton for these months.
Methanex Corporation Price and Consensus
Methanex Corporation price-consensus-chart | Methanex Corporation Quote
Zacks Rank & Key Picks
MEOH currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Agnico Eagle Mines Limited (AEM - Free Report) .
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.9%. The company's shares have soared 136.9% in the past year. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Eldorado’s current year earnings is pegged at $1.32 per share, indicating a year-over-year rise of 131.6%. The Zacks Consensus Estimate for EGO's current-year earnings has been going up in the past 30 days. EGO, a Zacks Rank #1 stock, beat the consensus estimate in each of the last four quarters, with the average earnings surprise being 430.3%. The company's shares have rallied roughly 87.6% in the past year.
Agnico Eagle Mines currently carries a Zacks Rank #2 (Buy). AEM beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 15.7%. The company's shares have soared 59.5% in the past year.