On Apr 8, we issued an updated research report on leading
). While the company is still exposed to natural gas curtailment
issues, it is well placed to gain from strong demand for
methanol, capacity expansion and its Geismar methanol
Methanex swung to a profit in fourth-quarter 2013, results for
which were reported on Jan 29. Healthy demand and higher methanol
pricing boosted top and bottom lines in the quarter. Methanex
expects the methanol industry and pricing to be healthy in the
first quarter of 2014.
Methanex, a Zacks Rank #1 (Strong Buy) stock, is the world's
largest supplier of methanol. The methanol industry and its
pricing environment appear attractive in the longer term as
global demand is expected to surpass new capacity additions.
Despite the global economic weakness, demand for methanol remains
healthy driven by energy-related applications in Asia,
particularly in China.
Methanex has also taken up a number of steps to boost
capacity. The company is progressing well with the relocation of
the first Chilean plant to Geismar, LA, and is also relocating
the second Chile plant (expected to come online in early 2016).
The Geismar project is expected to create significant value for
With continued initiatives to increase production in New
Zealand and Medicine Hat (Canada) and progress in the Louisiana
project, Methanex has the potential to increase its operating
capacity by nearly 3 million tons by 2016, which in turn, will
contribute to cash generation and increased supply to
Methanex's healthy financial position, strong global supply
network and competitive cost position are expected to strengthen
its position as the global leader in the methanol industry and
enable it to continue delivering incremental returns to
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