S&P moves Methanex view to stable

S&P said it changed its outlook for Methanex Corp. to stable from positive and affirmed its BB ratings on the company and its senior unsecured notes. However, the agency revised the recovery rating to 3 (50%-70%) from 4 (30%-50%).

“Methanol prices have continued to weaken since the third quarter of 2022, with Methanex's realized prices averaging about $338 per metric ton (mt) in the second quarter of 2023, compared to $422/mt from a year ago. The weakness in prices is primarily driven by slowing demand amid a challenging macroeconomic environment, slower-than-expected recovery in China and weak olefins prices challenging methanol-to-olefin (MTO) producer affordability,” S&P said in a press release.

The agency said it forecasts Methanex’s “adjusted funds from operations (FFO) to debt is unlikely to strengthen above 30% over the next two years, which was our previous expectation underpinning the positive outlook on the credit rating.”

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