Methanex Corporation Q1 2010 Earnings Call Transcript

I'll comment more on industry and pricing outlook a little later in the call. But first, I'd like to provide you an update on our operations. Our plant in New Zealand, the Motunui plant, continued to operate well and produced 208,000 tons of methanol. I'll comment more on the outlook for these operations and natural gas in that country in just a few moments.

In Trinidad, we produced 455,000 tons of methanol, which is a little below capacity for those plants as some cyclical issues led to a short period of unplanned downtime at our Trinidad site during the first quarter. These issues were resolved in late March. And the site has been operating well since that time. However, we are planning a short outage at (inaudible) plant next week to conduct another minor repair.

In Chile, we operated the site at about one-third capacity, and produced 304,000 tons of methanol. This represented our base quarter production in Chile in two years as we benefited from increased gas supply from the successful new gas development initiatives that are taking place in southern Chile. And again, I'll comment more on the outlook for natural gas and our plants in Chile in just a few moments.

I'll switch topic now and address the industry and pricing outlook. As I mentioned in our last conference call, methanol demand has recovered significantly over the past year. And current annualized demand has now surpassed pre-recession levels. We are continuing to see improved demand in both chemical and energy derivatives in all regions. And current indications are that demand will improve further over the coming quarters. The strong energy price environment continues to underpin healthy demand for methanol in both fuel-blending and DME in China. Demand growth into these derivatives has been very strong in recent years. And the outlook for both – the outlook for further growth is excellent.

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