Methanex Maintained at Buy at TPH as Methanol Prices Rise; Price Target at US$52.00

Tudor, Pickering, Holt on Wednesday maintained its buy rating on the shares of Methanex (MX.TO, MEOH) with a US$52.00 price target after the company raised May prices for its methanol.

"Positive. This morning MEOH raised its NAM methanol contract by +$13 to $645/tonne, and its China listing by +$10 to $390/tonne for May'24. The moves come as a little bit of a surprise on our end, given (1) MTD spot pricing is slightly down -$12 and -$3/tonne for each region, respectively, and (2) On a seasonal basis, methanol contracts tend to decline in the spring as Iranian capacity ramps up, and in fact each of the past two years, NAM contracts have slid -$20/tonne in May. However, one bullish factor is the recent fire and shutdown at the 300kt Ningxia Baofeng/Ningdong methanol plant last week. In addition, Iranian methanol inventories are quite low according to ICIS. We're still waiting for Asia Pacific methanol contracts for May, but even if they roll over, MEOH's global contract average is currently tracking +$19 q/q to $487/tonne, which would mark the highest levels since Q2'22. Maintain Buy on MEOH," analyst Matthew Blair wrote.

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