Chemanol expects high methanol prices on lower inventory, rising energy costs

Logo of Methanol Chemicals Co. (Chemanol)

Methanol Chemicals Co. (Chemanol) said that methanol prices are expected to rise in the near term due to steady methanol demand, low global inventory levels, ongoing supply challenges and rising energy costs.

In a conference call to discuss Q2 2022 financial results, the company said that it made significant improvements in the past three years to enhance plant reliability, expecting the next few years to be the “right time” to gain the benefits of such improvements.

On the methanol revamp project, Chemanol referred to the Ministry of Energy’s approval on allocating gas, indicating that the expansion project will be in the same location as the methanol site to increase capacity by more than 40%, which will generate an average annual net profit of $12 million.

The construction period will be nearly two years, with an internal rate of return (IRR) above 20%.

The petrochemical firm said it expanded its sales geographically and reached new customers in Africa, Canada and Europe.

According to data available on Argaam, Chemanol’s net profit increased to SAR 194.8 million in H1 2022, compared to SAR 90 million during the same period in 2021. Q2 net profit stood at SAR 92 million.