Methanex shares drop on lower methanol prices

21 March 2007 17:03  [Source: ICIS news]

TORONTO (ICIS news)--The share price of Canada’s Methanex fell sharply on Wednesday morning, with analysts citing a larger-than-expected drop in the company’s second-quarter Europe methanol reference price.

 

Methanex's shares were priced at $22.47/share, down 5.11%, in Wednesday morning trading in New York, and at Canadian dollars (C$) 26.03/share, down 5.35%, in Toronto.

 

Analysts at Canada’s RBC Capital Markets cited Methanex’s second-quarter non-discounted European methanol reference price of €250/tonne ($333/tonne), down 40% from €420/tonne in the first quarter, in explaining the fall in the methanol company's share price.

 

RBC added that it had expected only a €60/tonne decline from the first to the second quarter, compared with the actual decline of €170/tonne.

 

Methanex's shares generally move in line with methanol prices. The methanol price drop has negative implications for the Vancouver-based company’s shares, the analysts said.

 

RBC reduced its 2007 earnings per share (EPS) estimate for Methanex to $2.98, from $4.25, to reflect the faster-than-expected decline in methanol prices. The bank also cut its share price target for Methanex to $19, from $20, it said.

 

($1 = €0.75; $1 = C$1.157)

By: Stefan Baumgarten
+1 713 525 2653

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