Riverwater keeps faith with Methanex despite Titan shutdown
Riverwater Partners said Methanex weighed on its Sustainable Value Strategy in the second quarter, but retained a positive long-term view based on cash-flow potential and valuation.
Methanex was the largest detractor from Riverwater Partners’ Sustainable Value Strategy in the second quarter, according to the investment manager’s Q2 2026 investor letter. The strategy underperformed its benchmark during the period, primarily because of stock selection.
Riverwater attributed Methanex’s share-price weakness to the unwinding of a Middle East-related risk premium that had lifted methanol prices during the spring. The firm said a ceasefire or peace agreement removed the geopolitical premium linked to natural-gas supply and shipping through the Strait of Hormuz.
The decline was compounded by the reported indefinite idling of Methanex’s 860,000-tonne Titan methanol plant in Trinidad and Tobago. Riverwater said the plant was idled after Methanex failed to secure a new natural-gas contract before the current agreement expires in the third quarter of 2026.
Riverwater said the Titan shutdown was not included in its annual EBITDA estimates. The strategy had initiated only a partial position in Methanex and was continuing to assess the investment, according to the letter.
The firm expects Methanex’s cash flow to decline in 2027 compared with 2026, but said it remained attracted to the company’s free-cash-flow margin and double-digit free-cash-flow yield. Riverwater also said the shares appeared undervalued at normalised methanol prices.
Methanex shares closed at US$60.97 on 18 September, according to the report. The stock had gained 3.21 per cent over the previous month and 54.46 per cent over the previous year.
