Methanex (MEOH)

Gas In, Methanol Out

In 2025 Methanex realised $361/t, below the $400/t it calls mid-cycle, and earned $808M of Adjusted EBITDA. It turns natural gas into methanol and earns the gap between the two. Methanol is a building block for formaldehyde, acetic acid, plastics and fuels.

Methanex reports adjusted earnings and production on its own share of each plant, adding its stakes in two plants it does not control and removing partners' shares of those it does. So FY2025 production of 7.8 Mt (million tonnes) is its share.

Its share of full-rate capacity is 10.4 Mt a year, about 6.4 Mt of it in North America (March 2026 investor presentation). Some came with the methanol plants it bought from OCI Global, a Dutch chemicals group, on 27 June 2025. Those plants counted for only half of FY2025, so dividing FY2025 output by that capacity gives no utilisation rate. The price table below assumes 9.3 Mt in a full year, less than capacity because gas supply and maintenance hold output down.

FY2025 Against the Company's Own Price Table

Methanex gives no mid-cycle EBITDA figure. It publishes what the business would earn in a full year at three realised prices (March 2026 investor presentation, company estimate):

Each $50/t step adds less than $465M ($50 x 9.3 Mt), and the second less than the first, because gas outside North America costs more as methanol rises. The three estimates include about $30M from ammonia and $30M of savings expected from combining the OCI plants. FY2025 realised more than $350/t and still earned less than that row, mainly because it produced less than the table assumes.

Methanex also publishes posted prices: regional list prices, reset monthly or quarterly. Most customer contracts are priced off them, less discounts agreed with each customer, so the realised price sits well below. In FY2025 the realised price sat 39% below the volume-weighted posted average of $588/t; in FY2024, $355/t against $508/t, 30% below. Earnings follow the realised price.

Leverage Against Its Own Target

Methanex targets 2.0-2.5x adjusted debt to Adjusted EBITDA (March 2026 investor presentation). Adjusted debt is debt and leases on Adjusted EBITDA's ownership basis, before deducting cash: $3,706M at 31 December 2025. On FY2025 Adjusted EBITDA that is 4.6x (calculated), above the target range; the company says leverage has been higher than usual since the OCI deal. Repaying debt lowers the ratio; so does a higher methanol price, through EBITDA.

Gas Cost

Natural gas is the largest cost. The US plants buy gas priced off Henry Hub, the US benchmark, which averaged $3.52/MMBtu (dollars per million British thermal units, the usual gas unit) in 2025 (EIA). Gas contracts outside North America carry a base price plus a share of any rise in methanol prices, so gas cost there moves partly with methanol. The cost curve guide ranks gas-fed methanol on that gas cost.

How You Would Value a Methanol Producer

Value it on a normal year. 2025 was weak. Rebuild earnings at a long-run realised price and a full year of normal output, then apply a through-cycle EV/EBITDA multiple, or run a DCF that walks the price back up from the low. The mid-cycle EBITDA guide works both on fictional producers. Its methanol producer uses a $380/t realised price, a cautious input below the price Methanex calls mid-cycle, and long-run Henry Hub gas at $3.00/MMBtu, below the 2025 average.

What to Watch in the Financials

Realised price against mid-cycle. Each quarter's realised price shows the distance from the price Methanex calls mid-cycle.

A full year of the OCI plants. FY2026 is the first year they count for twelve months, so production can be read against the full-year output the price table assumes.

Adjusted debt. Each year-end figure shows the distance to the company's target range.

Key Risks

Customer discounts. Discounts are reset with customers, so posted prices can rise while the realised price lags.