METHANEX CORP earnings calls

high methanol prices' effect on demand/supply

Q (Hassan Ahmed · Alembic Global): The analyst asked if high methanol prices are causing demand destruction and whether suppliers will add capacity. He also asked how the company will balance deleveraging versus share buybacks and if there is a leverage threshold for bigger buybacks.

A: Management said demand is already being pressured and that coastal MTO operations have largely shut down, removing large volumes from the market. They set a leverage target at 2.0x to 2.5x adjusted debt to adjusted EBITDA and said buybacks will be flexible while the majority of focus remains on deleveraging.

"As it relates to leverage, we have set the leverage target at 2.0x to 2.5x on an adjusted debt to adjusted EBITDA level." — Richard W. Sumner (CEO)

long-term demand effects and recovery speed

Q (Laurence Alexander · Jefferies): The analyst asked whether the price surge is changing long-term decisions, like orders for fuel-flexible ships, and whether any end markets are delaying big decisions. He also asked how quickly different curtailed demand areas (MTO, DME, marine) could restart if prices fall.

A: Management said they have not seen a change in long-term downstream capital decisions yet and vessel commitments remain. They said coastal MTO could restart if supply is released but would need lower methanol prices, and other demand would return into traditional chemical uses with possible short-term volatility.

"I do not think it is it is resulting in yet a change in long term downstream capital deployment, but it is something we will certainly watch." — Richard W. Sumner (CEO)

Chile production and Q3 pricing drivers

Q (Matthew Blair · TPH): The analyst asked if improved Argentina gas production will let Chile output rise in 2027 and 2028, and whether any pipeline or other constraints could block that. He also asked if Q3 realized pricing had a one-time boost from selling New Zealand gas commitments or other factors.

A: Management said they have more than enough pipeline capacity to run Chile plants year-round and are optimistic about Argentina developments, but any year-round opportunity will take a few years. They said the Q3 pricing boost was not from gas sales but from Asia Pacific price increases, especially in September.

"We have got more than enough pipeline capacity to bring gas into our plants for full rates year round." — Richard W. Sumner (CEO)

capital allocation: buybacks, growth, dividend

Q (Ben Isaacson · Scotiabank): The analyst asked whether the company would deploy cash to growth projects or raise the dividend beyond the announced 5% buyback if cash flow stays strong. He also asked whether the firm still views $350 as the right methanol mid-cycle price.

A: Management said the focus is on deleveraging but they will consider value-accretive growth opportunistically and will be disciplined on M&A and organic projects given high build costs. They said buybacks look attractive at conservative mid-cycle valuations and they remain committed to the dividend level while using buybacks flexibly.

buyback vs deleveraging and plant status

Q (Joel Jackson · BMO Mark.): The analyst asked if the company would upsize the buyback if earnings repeat and how they will choose between buybacks and debt repayment. He also asked about recent multi-day outages at Beaumont and whether Egyptian operations face gas cuts.

A: Management said they are monitoring the situation and will balance buybacks and deleveraging to protect downside and preserve optionality; buybacks will be part of the plan. They said nothing major to report at Beaumont beyond cooling tower repairs and that Egyptian plants are running at full rates while gas balances are monitored.

"As it relates to Egypt, we continue to run our plants at full rates." — Richard W. Sumner (CEO)

debt level and asset optimization opportunities

Q (Steve Hansen · Raymond James): The analyst asked why the company would not pay debt down closer to zero given strong cash flows. He also asked if the acquired OCI assets offer brownfield or efficiency projects to invest in.

A: Management said achieving near-zero leverage would need a sustained high-price environment and noted uncertainty about how things normalize, so they prefer to move deleveraging to protect downside and keep options. On the OCI assets, integration has gone well; one world-scale plant has limited debottlenecking options while other sites may have smaller opportunities and required sustaining capital.

"Do not see a lot of options in capital or debottleneck at that site." — Richard W. Sumner (CEO)

bond repayment, debottlenecks, NZ gas contracts

Q (Nelson Ng · RBC): The analyst asked if there would be any difficulty paying down the December 2029 notes after the October 2027 notes. He also asked whether low-hanging debottlenecks are already captured and whether winding down New Zealand gas contracts produces proceeds.

A: The CFO said there are no difficulties repaying the bonds and the company has multiple options (open market, tender) to deploy capital to bonds. Management said most debottleneck and efficiency items are smaller sustaining projects included in the usual ~$150 million annual capital, and the New Zealand contract monetization is a small asset that will generate some but not material cash.

"So lots of options, and we are looking at the best way to deploy that for the company." — Dean Richardson

turnaround schedule and spot contract exposure

Q (Hamir Patel · CIBC): The analyst asked for the turnaround schedule in 2027 and 2028 and whether capital spending will rise. He also asked if the company has increased spot exposure and what percent of sales are spot.

A: Management said they had no turnarounds this year, are pre-spending for a heavier turnaround schedule in 2027 (on the higher side of 2 to 3 turnarounds), and 2027 capex will be higher than the usual $150 million but not dramatically so. They said they are not selling on a spot basis; their term contracts reference spot prices in some Asia Pacific contracts, which drove meaningful adjustments.

"So we are not we are not selling on a spot basis." — Richard W. Sumner (CEO)

contract pricing and new customer deals

Q (Ahmed Abdullah · National Bank of Canada): The analyst asked whether current market conditions are improving contract pricing and how much of any improvement will persist as spot normalizes. He also asked whether the company has secured new longer-term customer commitments during the disruption.

A: Management said contracts are year-round and they are in the recontracting period for 2027, so it is too early to say but they do not expect big changes for next year. They said they continuously high-grade their sales portfolio and do not expect overall sales levels to change significantly in 2027, though they review which regions and customers they will serve.

"Our contracts are on a year round basis, and we are in our recontracting period right now for 2027." — Richard W. Sumner (CEO)

China winter shutdowns and price risk

Q (James Cannon · UBS): The analyst asked how typical fourth-quarter capacity shutdowns in China will affect the market and whether prices are skewed to the upside or will trigger more demand shutdowns.

A: Management said winter coal restrictions in China could constrain operations and add demand pressure, and they will watch that closely because coal prices are already high. They noted China methanol is at $500 a ton, warned about pushing prices too high because that could damage downstream demand, and said this keeps the market tight through winter months.

"We are at $500 a ton methanol price in China, which we have not seen for quite some time." — Richard W. Sumner (CEO)