01:32 PM EDT, 06/05/2024 (MT Newswires) -- Methanex Corporation ( MEOH ) said Tuesday that its 1.26 million tonne Egypt methanol production facility (Methanex ( MEOH ) 50% equity interest of 0.63 million tonnes per annum) was temporarily idled yesterday morning as lower gas supply and increased seasonal demand for power generation has led to gas curtailments to industrial plants. Methanex ( MEOH ) is working with its partner and gas supplier to resume gas supply. The company did not indicate whether it will be able to recover the lost margin from idling the plant, which RBC estimates will be more than US$20 million of EBITDA per quarter.

RBC believes the idling of the Egypt plant will have a negative impact on the shares of Methanex ( MEOH ), particularly after the facility was previously offline from October 2023 to February 2024 due to a mechanical failure. "Although the actual financial impact of the idling may not be that material, we believe potential further idling over the summer (as well as in future years) and the downtime the Egypt facility will experience in 2023/24 could weaken investor sentiment," analyst Nelson Ng writes.

Methanex ( MEOH ) is rated Sector Perform, with a US$55 target.

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