UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

METHANEX CORPORATION

(Registrant’s name)

SUITE 1800, 200 BURRARD STREET, VANCOUVER, BC V6C 3M1 CANADA
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F o          Form 40-F þ

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes o          No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82                    .

 

 

NEWS RELEASE		Methanex Corporation 1800 — 200 Burrard St. Vancouver, BC Canada V6C 3M1 Investor Relations: (604) 661-2600 http://www.methanex.com

For immediate release

METHANEX REPORTS THIRD QUARTER RESULTS — METHANOL DEMAND HEALTHY

OCTOBER 26, 2011

For the third quarter of 2011, Methanex reported Adjusted EBITDA¹ of $134.8 million and net income attributable to Methanex shareholders of $62.3 million ($0.67 basic net income per common share and $0.59 per share on a diluted basis²). This compares with Adjusted EBITDA¹ of $103.7 million and net income attributable to Methanex shareholders of $40.5 million ($0.44 basic net income per common share and $0.43 per share on a diluted basis²) for the second quarter of 2011.

Bruce Aitken, President and CEO of Methanex commented, “Our new Egypt and Medicine Hat plants operated very well, making a significant contribution to our earnings. In addition, methanol demand and pricing were higher in the third quarter. Entering the fourth quarter, methanol demand continues to be healthy and the longer term outlook is excellent, as there is little new capacity being added to the industry over the next few years to meet expected demand growth.”

Mr. Aitken concluded, “We have a healthy balance sheet with US$261 million of cash on hand and an undrawn credit facility. With the additions of Egypt and Medicine Hat earlier this year, we are in a stronger position to generate cash flows, invest in strategic opportunities to grow the Company, and continue to deliver on our commitment to return excess cash to shareholders.”

A conference call is scheduled for October 27, 2011 at 12:00 noon ET (9:00 am PT) to review these third quarter results. To access the call, dial the Conferencing operator ten minutes prior to the start of the call at (416) 695-6616, or toll free at (800) 396-7098. A playback version of the conference call will be available for three weeks at (905) 694-9451, or toll free at (800) 408-3053. The passcode for the playback version is 1632584. There will be a simultaneous audio-only webcast of the conference call, which can be accessed from our website at www.methanex.com. The webcast will be available on our website for three weeks following the call.

Methanex is a Vancouver-based, publicly traded company and is the world’s largest supplier of methanol to major international markets. Methanex shares are listed for trading on the Toronto Stock Exchange in Canada under the trading symbol “MX”, on the NASDAQ Global Market in the United States under the trading symbol “MEOH”, and on the foreign securities market of the Santiago Stock Exchange in Chile under the trading symbol “Methanex”. Methanex can be visited online at www.methanex.com.

-more-

FORWARD-LOOKING INFORMATION WARNING

This Third Quarter 2011 press release contains forward-looking statements with respect to us and the chemical industry. Refer to Forward-Looking Information Warning in the attached Third Quarter 2011 Management’s Discussion and Analysis for more information.

-end-

For further information, contact:

Jason Chesko
Director, Investor Relations
Tel: 604.661.2600

3 Interim Report For the Three Months Ended September 30, 2011 At October 26, 2011 the Company had 93,232,020 common shares issued and outstanding and stock options exercisable for 3,467,134 additional common shares.		Share Information Methanex Corporation’s common shares are listed for trading on the Toronto Stock Exchange under the symbol MX, on the Nasdaq Global Market under the symbol MEOH and on the foreign securities market of the Santiago Stock Exchange in Chile under the trading symbol Methanex. Transfer Agents & Registrars CIBC Mellon Trust Company 320 Bay Street Toronto, Ontario, Canada M5H 4A6 Toll free in North America: 1-800-387-0825		Investor Information All financial reports, news releases and corporate information can be accessed on our website at www.methanex.com. Contact Information Methanex Investor Relations 1800 — 200 Burrard Street Vancouver, BC Canada V6C 3M1 E-mail: invest@methanex.com Methanex Toll-Free: 1-800-661-8851

THIRD QUARTER MANAGEMENT’S DISCUSSION AND ANALYSIS

Except where otherwise noted, all currency amounts are stated in United States dollars. This Third Quarter 2011 Management’s Discussion and Analysis (“MD&A”) dated October 26, 2011 for Methanex Corporation (“the Company”) should be read in conjunction with the Company’s condensed consolidated interim financial statements for the periods ended September 30, 2011, June 30, 2011 and March 31, 2011, which are prepared in accordance with International Accounting Standards (IAS) 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (IASB), as well as the 2010 Annual Consolidated Financial Statements and the MD&A included in the Methanex 2010 Annual Report, which were prepared in accordance with Canadian generally accepted accounting principles (Canadian GAAP). The Methanex 2010 Annual Report and additional information relating to Methanex is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. For a discussion of the Company’s adoption of International Financial Reporting Standards (IFRS), refer to page 11 of this MD&A.

		Three Months Ended												Nine Months Ended
		Sep 30				Jun 30				Sep 30				Sep 30				Sep 30
($ millions, except where noted)		2011				2011				20107				2011				20107
Production (thousands of tonnes) (attributable to Methanex shareholders)			1,035				1,050				895				2,886				2,627
Sales volumes (thousands of tonnes):
Produced methanol (attributable to Methanex shareholders)			983				970				885				2,801				2,709
Purchased methanol			672				664				792				2,171				2,074
Commission sales 1			235				231				101				638				358
Total sales volumes			1,890				1,865				1,778				5,610				5,141
Methanex average non-discounted posted price ($  per tonne) 2			445				421				334				434				339
Average realized price ($  per tonne) 3			377				363				286				369				291
Adjusted EBITDA (attributable to Methanex shareholders) 4			134.8				103.7				55.9				316.4				199.0
Cash flows from operating activities			119.1				77.6				61.4				321.3				169.8
Adjusted cash flows from operating activities (attributable to Methanex shareholders) 5			103.6				86.5				64.7				270.4				209.3
Net income attributable to Methanex shareholders			62.3				40.5				28.7				137.5				70.5
Basic net income per common share attributable to Methanex shareholders			0.67				0.44				0.31				1.48				0.76
Diluted net income per common share attributable to Methanex shareholders 6			0.59				0.43				0.31				1.38				0.75
Common share information (millions of shares):
Weighted average number of common shares			93.2				93.0				92.2				93.0				92.2
Diluted weighted average number of common shares			94.4				94.6				93.3				94.4				93.4
Number of common shares outstanding, end of period			93.2				93.2				92.2				93.2				92.2

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 1
MANAGEMENT’S DISCUSSION AND ANALYSIS

PRODUCTION SUMMARY

		Q3 2011								Q2 2011				Q3 2010				YTD Q3 2011				YTD Q3 2010
(thousands of tonnes)		Capacity1				Production				Production				Production				Production				Production
Chile I, II, III and IV			950				116				142				194				441				727
Atlas (Trinidad) (63.1% interest)			288				170				263				284				696				618
Titan (Trinidad)			225				224				186				217				531				658
New Zealand 2			213				209				207				200				619				624
Egypt (60% interest)			190				191				178				—				400				—
Medicine Hat			118				125				74				—				199				—
			1,984				1,035				1,050				895				2,886				2,627

Chile

During the third quarter of 2011, we produced 116,000 tonnes in Chile operating one plant at approximately 40% capacity. We continue to operate our methanol facilities in Chile significantly below site capacity. This is primarily due to curtailments of natural gas supply from Argentina — refer to the Management’s Discussion and Analysis included in our 2010 Annual Report for more information.

Lower production at our Chile facilities during the third quarter of 2011 compared with the second quarter of 2011 was due to the need for the state-owned energy company Empresa Nacional del Petroleo (ENAP) to satisfy incremental natural gas demand for residential purposes in southern Chile during the winter season when residential energy demand is at its peak, as well as declines in the deliverability from existing gas fields. Lower methanol production in Chile for the first nine months of 2011 compared with the same period in 2010 is due primarily to lower gas deliveries from ENAP and declines in deliverability from existing gas fields.

Our goal is to progressively increase production at our Chile site with natural gas from suppliers in Chile. We are pursuing investment opportunities with ENAP, GeoPark Chile Limited (GeoPark) and others to help accelerate natural gas exploration and development in southern Chile. We are working with ENAP to develop natural gas in the Dorado Riquelme block. Under the arrangement, we fund a 50% participation in the block and, as at September 30, 2011, we had contributed approximately $105 million. Over the past few years, we have also provided GeoPark with $57 million (of which approximately $40 million had been repaid at September 30, 2011) to support and accelerate GeoPark’s natural gas exploration and development activities. GeoPark has agreed to supply us with all natural gas sourced from the Fell block under a ten-year exclusive supply arrangement that commenced in 2008. During the third quarter of 2011, substantially all production at our Chilean facilities was produced with natural gas supplied from the Fell and Dorado Riquelme blocks.

Other investment activities are also supporting the acceleration of natural gas exploration and development in areas of southern Chile. In late 2007, the government of Chile completed an international bidding round to assign oil and natural gas exploration areas that lie close to our production facilities and announced the participation of several international oil and gas companies. For two of the exploration blocks, we are participating in a consortium with other international oil and gas companies with GeoPark as the operator. We have approximately 15% participation in the consortium and at September 30, 2011, we had contributed $3 million for our share of the exploration costs. In 2010, the Chilean government initiated a new round allocating further exploration acreage to international oil and gas companies. Contracts for these new exploration areas are currently under negotiation.

While significant investments have been made in the last few years for natural gas exploration and development in southern Chile, the timelines for significant increases in gas production are much longer than we had originally anticipated and existing gas fields are experiencing declines. As a result, the short-term outlook for gas supply in Chile continues to be challenging. We are examining the viability of utilizing coal gasification as a feedstock and relocation of capacity to an alternative location.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 2
MANAGEMENT’S DISCUSSION AND ANALYSIS

The future operating rate of our Chile site is primarily dependent on demand for natural gas for residential purposes, which is higher in the southern hemisphere winter, production rates from existing natural gas fields, and the level of natural gas deliveries from future exploration and development activities in southern Chile. We cannot provide assurance regarding the production rates from existing natural gas fields or that we, ENAP, GeoPark or others will be successful in the exploration and development of natural gas or that we will obtain any additional natural gas from suppliers in Chile on commercially acceptable terms. As a result, we cannot provide assurance in the level of natural gas supply or that we will be able to source sufficient natural gas to operate any capacity in Chile or that we will have sufficient future cash flows from Chile to support the carrying value of our Chilean assets and that this will not have an adverse impact on our results of operations and financial condition.

Trinidad

Our equity ownership of methanol facilities in Trinidad represents over 2.0 million tonnes of cost-competitive annual capacity. During the third quarter of 2011 we produced 394,000 tonnes compared with 449,000 tonnes during the second quarter of 2011. Lower production in the third quarter of 2011 compared with the second quarter of 2011 was primarily due to an unplanned outage at our Atlas facility which lasted approximately 21 days. We restarted operations at the Atlas facility in mid-August and have since operated the plant at approximately 70% of capacity. We expect to maintain operating the plant at approximately 70% of capacity until the next major turnaround currently scheduled for early 2012. Although our Titan facility operated at full capacity during the third quarter we did experience some gas curtailments late in the third and into the fourth quarter due to upstream outages. We are engaged with key stakeholders to find a solution to this issue, but in the meantime expect to continue to experience some gas curtailments to our Trinidad site.

New Zealand

Our New Zealand facilities provide cost-competitive capacity and are underpinned by shorter term natural gas supply contracts. During the third quarter of 2011, we produced 209,000 tonnes compared with 207,000 tonnes during the second quarter of 2011. We are currently operating one 850,000 tonne per year plant at our Motunui facility in New Zealand and we have natural gas contracts with a number of gas suppliers that will allow us to continue to operate this plant through 2012. We also have an additional 1.38 million tonnes per year of idled capacity in New Zealand, including a second 850,000 tonne per year Motunui plant and a 530,000 tonne per year plant at our nearby site in Waitara Valley. These facilities provide the potential to increase production in New Zealand depending on the methanol supply and demand dynamics and the availability of economically priced natural gas feedstock. We believe there has been continued improvement in the natural gas supply outlook in New Zealand and we are focused on accessing additional natural gas supply to increase production in New Zealand. We are continuing to pursue opportunities to obtain economically priced natural gas with suppliers in New Zealand to operate a second plant.

Egypt

The 1.26 million tonne per year methanol plant in Egypt commenced commercial operations in mid-March and has continued to operate well since that time. During the third quarter of 2011, the Egypt methanol facility (60% interest) produced 191,000 tonnes compared with 178,000 tonnes during the second quarter of 2011. We have a 60% interest in the facility and have marketing rights for 100% of the production.

Medicine Hat

Our 470,000 tonne per year facility in Medicine hat, Alberta was restarted in late April 2011, and has continued to operate well since that time. During the third quarter of 2011, we produced 125,000 tonnes compared with 74,000 tonnes during the second quarter of 2011. We have a program in place to purchase natural gas on the Alberta gas market and we have contracted sufficient volumes of natural gas to meet over 80% of our natural gas requirements when operating at capacity for the period to March 2013 with the remainder of natural gas purchased on the spot market. We believe that the long term natural gas dynamics in North America will support the long term operation of this facility.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 3
MANAGEMENT’S DISCUSSION AND ANALYSIS

FINANCIAL RESULTS

For the third quarter of 2011, we recorded Adjusted EBITDA of $134.8 million and net income attributable to Methanex Corporation shareholders of $62.3 million ($0.67 basic net income per common share and $0.59 per share on a diluted basis). This compares with Adjusted EBITDA of $103.7 million and net income attributable to Methanex Corporation shareholders of $40.5 million ($0.44 basic net income per common share and $0.43 per share on a diluted basis) and Adjusted EBITDA of $55.9 million and net income attributable to Methanex Corporation shareholders of $28.7 million ($0.31 basic and diluted net income per common share) for the second quarter of 2011 and third quarter of 2010, respectively.

For the nine months ended September 30, 2011, we recorded Adjusted EBITDA of $316.4 million and net income attributable to Methanex Corporation shareholders of $137.5 million ($1.48 basic net income per common share and $1.38 per share on a diluted basis). This compares with Adjusted EBITDA of $199.0 million and net income attributable to Methanex Corporation shareholders of $70.5 million ($0.76 basic net income per common share and $0.75 per share on a diluted basis) during the same period in 2010.

For the three and nine month periods ended September 30, 2011, share-based compensation created additional volatility in our earnings due to significant changes in our share price. We grant share-based awards as an element of compensation and, as more fully discussed on page 6, certain of these awards are marked to market each quarter with the changes in fair value recognized in earnings for the proportion of the service that has been rendered at the reporting date. During the third quarter of 2011, our share price experienced a significant decline and this resulted in a share-based compensation recovery. The amount of share-based compensation expense (recovery) included in net income and Adjusted EBITDA is as follows:

		Three Months Ended												Nine Months Ended
		Sep 30				Jun 30				Sep 30				Sep 30				Sep 30
($ millions)		2011				2011				2010				2011				2010
Share-based compensation expense (recovery)		$	(21	)		$	2			$	9			$	(9	)		$	18

Included in the share-based compensation expense (recovery) is the fair value adjustment related to tandem share appreciation rights (TSARs). TSARs are share-based awards that may be settled in cash or common shares at the holder’s option. TSARs are accounted for as if they are cash-settled and as a result, a fair value adjustment is included in share-based compensation expense (recovery) each quarter. For purposes of calculating diluted net income per common share, the more dilutive of the cash-settled method or equity-settled method is used. For the three and nine month periods ended September 30, 2011, diluted net income per common share is lower than basic net income per common share by $0.08 and $0.10, respectively, primarily due to the impact of TSARs being treated as equity-settled for purposes of calculating diluted net income per common share. See note 8 of the Company’s condensed consolidated interim financial statements for the calculation of diluted net income per common share.

EARNINGS ANALYSIS

Our operations consist of a single operating segment — the production and sale of methanol. In addition to the methanol that we produce at our facilities, we also purchase and re-sell methanol produced by others and we sell methanol on a commission basis. We analyze the results of all methanol sales together, excluding commission sales volumes. The key drivers of change in our Adjusted EBITDA for methanol sales are average realized price, sales volume and cash costs.

We own 60% of the 1.26 million tonne per year Egypt methanol facility and we account for this investment using consolidation accounting, which results in 100% of the revenues and expenses being included in our financial statements with the other investors’ interest in the methanol facility being presented as “non-controlling interests.” For purposes of reviewing our operations, we analyze Adjusted EBITDA in the discussion below excluding the amounts associated with the other investors’ 40% non-controlling interest.

For a further discussion of the definitions and calculations used in our Adjusted EBITDA analysis, refer to How We Analyze Our Business. Also, refer to the Supplemental Non-IFRS Measures section on page 12 for a reconciliation of Adjusted EBITDA to the most comparable IFRS measure.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 4
MANAGEMENT’S DISCUSSION AND ANALYSIS

Adjusted EBITDA (attributable to Methanex shareholders)

The changes in Adjusted EBITDA resulted from changes in the following:

		Q3 2011				Q3 2011				YTD Q3 2011
		compared with				compared with				compared with
($ millions)		Q2 2011				Q3 2010				YTD Q3 2010
Average realized price		$	22			$	151			$	388
Sales volume			2				—				12
Total cash costs			7				(72	)			(283	)
		$	31			$	79			$	117

Average realized price

		Three Months Ended												Nine Months Ended
		Sep 30				Jun 30				Sep 30				Sep 30				Sep 30
($ per tonne, except where noted)		2011				2011				2010				2011				2010
Methanex average non-discounted posted price 1			445				421				334				434				339
Methanex average realized price			377				363				286				369				291
Average discount			15	%			14	%			14	%			15	%			14	%

Throughout the third quarter of 2011, methanol demand continued to be healthy despite the increase in concern around the global economy. Industry supply and demand conditions are favorable, and as a result, the pricing environment has been relatively stable (refer to Supply/Demand Fundamentals section on page 9 for more information). Our average non-discounted posted price for the third quarter of 2011 was $445 per tonne compared with $421 per tonne for the second quarter of 2011 and $334 per tonne for the third quarter of 2010. Our average realized price for the third quarter of 2011 was $377 per tonne compared with $363 per tonne for the second quarter of 2011 and $286 per tonne for the third quarter of 2010. The change in our average realized price for the third quarter of 2011 increased Adjusted EBITDA by $22 million compared with the second quarter of 2011 and increased Adjusted EBITDA by $151 million compared with the third quarter of 2010. Our average realized price for the nine months ended September 30, 2011 was $369 per tonne compared with $291 per tonne for the same period in 2010 and this increased Adjusted EBITDA by $388 million.

Sales volume

Total methanol sales volumes excluding commission sales volumes for the third quarter of 2011 were comparable to the second quarter of 2011 and the third quarter of 2010. Total methanol sales volumes excluding commission sales were higher for the nine months ended September 30, 2011 compared with the nine months ended September 30, 2010 by 189,000 tonnes and this increased Adjusted EBITDA by $12 million. We increased our sales volumes in 2011 compared with 2010 primarily as a result of increased supply from the Egypt and Medicine Hat methanol facilities.

Total cash costs

The primary driver of changes in our total cash costs are changes in the cost of methanol we produce at our facilities and changes in the cost of methanol we purchase from others. Most of our production facilities are underpinned by natural gas purchase agreements with pricing terms that include base and variable price components. The variable component is adjusted in relation to changes in methanol prices above pre-determined prices at the time of production. We supplement our production with methanol produced by others through methanol offtake contracts and purchases on the spot market to meet customer needs and support our marketing efforts within the major global markets. We have adopted the first-in, first-out method of accounting for inventories and it generally takes between 30 and 60 days to sell the methanol we produce or purchase. Accordingly, the changes in Adjusted EBITDA as a result of changes in natural gas costs and purchased methanol costs will depend on changes in methanol pricing and the timing of inventory flows.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 5
MANAGEMENT’S DISCUSSION AND ANALYSIS

The impact on Adjusted EBITDA from changes in our cash costs are explained below:

		Q3 2011				Q3 2011				YTD Q3 2011
		compared with				compared with				compared with
($ millions)		Q2 2011				Q3 2010				YTD Q3 2010
Methanex-produced methanol costs		$	(8	)		$	(37	)		$	(89	)
Proportion of produced methanol sales			—				12				(3	)
Purchased methanol costs			(6	)			(63	)			(177	)
Logistics costs			1				(4	)			(16	)
Other, net			(3	)			(10	)			(25	)
Change in Adjusted EBITDA before changes in share-based compensation		$	(16	)		$	(102	)		$	(310	)
Share-based compensation			23				30				27
Change in Adjusted EBITDA		$	7			$	(72	)		$	(283	)

Methanex-produced methanol costs

We purchase natural gas for the Chile, Trinidad, Egypt and New Zealand methanol facilities under natural gas purchase agreements where the terms include a base price and a variable price component linked to the price of methanol. For all periods presented, changes in natural gas costs associated with produced methanol were primarily due to the impact of changes in methanol prices and the timing of inventory flows.

Proportion of produced methanol sales

The cost of purchased methanol is generally higher than the cost of produced methanol. Accordingly, an increase in the proportion of produced methanol sales results in a decrease in our overall cost structure for a given period. For the third quarter of 2011 compared with the second quarter of 2011, the impact of higher sales volumes from our Egypt and Medicine Hat facilities was offset by lower sales of methanol produced at our Atlas and Chile facilities. For the third quarter of 2011 compared with the third quarter of 2010, higher sales of produced methanol, primarily due to the impact of sales volumes from the Egypt and Medicine Hat facilities, increased EBITDA by $12 million.

For the nine month period ended September 30, 2011 compared with nine month period ended September 30, 2010, the impact of higher sales volumes from our Egypt and Medicine Hat facilities was offset by lower sales of methanol produced at our Chile and Titan facilities.

Purchased methanol costs

Purchased methanol costs were higher for all periods presented primarily as a result of higher methanol pricing.

Logistics costs

For the third quarter of 2011 compared with the second quarter of 2011, logistics costs were similar. For the three and nine month periods ended September 30, 2011 compared with same periods in 2010, logistics costs were higher by $4 million and $16 million, respectively, due primarily to higher bunker fuel costs.

Other, net

For the third quarter of 2011 and the nine month period ended September 30, 2011 compared with the comparable periods in 2010, other costs were higher primarily as a portion of fixed manufacturing costs were charged directly to earnings rather than to inventory due to lower production at our facilities in Chile and Trinidad as well as the impact of a weaker US dollar on the cost structure of our operations.

Share-based compensation

We grant share-based awards as an element of compensation. Share-based awards granted include stock options, share appreciation rights, tandem share appreciation rights, deferred share units, restricted share units and performance share units.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 6
MANAGEMENT’S DISCUSSION AND ANALYSIS

For stock options, the cost is measured based on an estimate of the fair value at the date of grant using the Black-Scholes option pricing model and this grant-date fair value is recognized as compensation expense over the related service period with no subsequent re-measurement in fair value. Accordingly, share-based compensation expense associated with stock options will not vary significantly from period to period. Commencing in 2010, we granted share appreciation rights (SARs) and tandem share appreciation rights (TSARs) to replace grants of stock options with the objective to reduce dilution to shareholders. SARs and TSARs are units that grant the holder the right to receive a cash payment upon exercise for the difference between the market price of the Company’s common shares and the exercise price, which is determined at the date of grant. SARs and TSARs are measured based on estimated fair value each quarter, which is determined using the Black-Scholes option pricing model.

Deferred, restricted and performance share units are grants of notional common shares that are redeemable for cash upon vesting based on the market value of the Company’s common shares and are non-dilutive to shareholders. Performance share units have an additional feature where the ultimate number of units that vest will be determined by the Company’s total shareholder return in relation to a predetermined target over the period to vesting. The number of units that will ultimately vest will be in the range of 50% to 120% of the original grant. For deferred, restricted and performance share units, the fair value is initially measured at the grant date and subsequently re-measured each quarter based on the market value of the Company’s common shares.

For all the share-based awards with the exception of stock options, the initial value and any subsequent change in fair value is recognized in earnings over the related service period for the proportion of the service that has been rendered at each reporting date. Accordingly, share-based compensation associated with these share-based awards may vary significantly from period to period as a result of changes in the share price.

As a result of the decrease in our share price during the third quarter of 2011, we recorded a share-based compensation recovery of $21 million. This compares with share-based compensation expense of $2 million for the second quarter of 2011 and $9 million for the third quarter of 2010. For the nine month period ending September 30, 2011, we recorded a share-based compensation recovery of $9 million compared with a share-based compensation expense of $18 million for the same period in 2010.

Depreciation and Amortization

Depreciation and amortization was $44 million for the third quarter of 2011 compared with $40 million for the second quarter of 2011 and $35 million for the third quarter of 2010. The increase in depreciation and amortization for both periods is primarily a result of the commencement of depreciation associated with the methanol facilities in Egypt (100% basis) and Medicine Hat and higher unabsorbed depreciation attributable to an unplanned outage at our Atlas facility which lasted approximately 21 days.

Depreciation and amortization was $113 million for the nine month period ended September 30, 2011 compared with $106 million in the same period in 2010 primarily due to the commencement of depreciation associated with the methanol facilities in Egypt (100% basis) and Medicine Hat.

Finance Costs

		Three Months Ended												Nine Months Ended
		Sep 30				Jun 30				Sep 30				Sep 30				Sep 30
($ millions)		2011				2011				2010				2011				2010
Finance costs before capitalized interest		$	17			$	17			$	18			$	51			$	51
Less capitalized interest			—				—				(10	)			(7	)			(28	)
Finance costs		$	17			$	17			$	8			$	44			$	23

Capitalized interest relates to interest costs capitalized during the construction of the 1.26 million tonne per year methanol facility in Egypt (100% basis). The Egypt methanol facility commenced production in mid-March 2011 and accordingly, we ceased capitalization of interest costs from this date.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 7
MANAGEMENT’S DISCUSSION AND ANALYSIS

Finance Income and Other Expenses

		Three Months Ended												Nine Months Ended
		Sep 30				Jun 30				Sep 30				Sep 30				Sep 30
($ millions)		2011				2011				2010				2011				2010
Finance income and other expenses		$	(2	)		$	1			$	(1	)		$	5			$	—

Finance income and other expenses for the third quarter of 2011 was $2 million expense compared with $1 million income for the second quarter of 2011 and a $1 million expense for the third quarter of 2010. Finance income and other expenses for the nine month period ended September 30, 2011 was $5 million income compared with nil for the nine month period ended September 30, 2010. The change in finance income and other expenses for all periods presented was primarily due to the impact of changes in foreign exchange rates.

Income Taxes

The effective tax rate for the third quarter of 2011 was approximately 20% compared with approximately 25% for the second quarter of 2011. We earn the majority of our pre-tax earnings in Trinidad, Egypt, Chile, Canada and New Zealand. In Trinidad and Chile, the statutory tax rate is 35% and in Egypt, the statutory tax rate is 25%. Our Atlas facility in Trinidad has partial relief from corporation income tax until 2014. During the third quarter of 2011, we earned a higher proportion of our consolidated income from methanol produced in Canada and New Zealand, where we have unrecognized loss carryforwards, and this contributed to a lower effective tax rate compared with the second quarter of 2011.

In Chile the tax rate consists of a first tier tax that is payable when income is earned and a second tier tax that is due when earnings are distributed from Chile. The second tier tax is initially recorded as future income tax expense and is subsequently reclassified to current income tax expense when earnings are distributed.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 8
MANAGEMENT’S DISCUSSION AND ANALYSIS

SUPPLY/DEMAND FUNDAMENTALS

We estimate that methanol demand is growing at a rate of approximately 6% in 2011 and is currently approximately 49 million tonnes on an annualized basis. Increases in demand have been driven by both traditional and energy derivatives in Asia (particularly in China). Entering the fourth quarter of 2011, despite recent elevated concerns around the global economic outlook, we have not seen any significant impact on global methanol demand.

Traditional derivatives account for about two-thirds of global methanol demand and are correlated to industrial production.

Methanex Non-Discounted Regional Posted Prices1
		Oct				Sep				Aug				Jul
(US$ per tonne)		2011				2011				2011				2011
United States			459				459				459				426
Europe2			439				404				426				418
Asia			470				470				470				420

Energy derivatives account for about one third of global methanol demand and over the last few years high energy prices have driven strong demand growth for methanol into energy applications such as gasoline blending and DME, primarily in China. Methanol blending into gasoline in China has been particularly strong and we believe that future growth in this application is supported by recent regulatory changes in that country. Many provinces in China have implemented fuel blending standards, and an M85 (or 85% methanol) national standard took effect December 1, 2009. We believe demand potential into energy derivatives will be stronger in a high energy price environment.

During the third quarter of 2011, as a result of steady demand and planned and unplanned industry outages, market conditions were favorable and pricing was stable. Our average non-discounted price for October 2011 is approximately $458 per tonne and we recently announced our North America non-discounted price for November at $459 per tonne, which is unchanged from October.

Over the next few years, there is little new capacity expected to come on-stream outside China. There is a 0.85 million tonne plant expected to restart in Beaumont, Texas in 2012 and a 0.7 million tonne plant expected to start up in Azerbaijan in 2014. We expect that production from new capacity in China will be consumed in that country and that higher cost production capacity in China will need to operate in order to satisfy demand growth.

LIQUIDITY AND CAPITAL RESOURCES

Consolidated cash flows from operating activities in the third quarter of 2011 were $119.1 million compared with $77.6 million for the second quarter of 2011 and $61.4 million for the third quarter of 2010. The change in consolidated cash flows from operating activities in the third quarter of 2011 compared with the second quarter of 2011 and the third quarter of 2010 is primarily a result of changes in Adjusted EBITDA, excluding share based compensation expense (recovery), and changes in non-cash working capital.

Adjusted cash flows from operating activities, which excludes the amounts associated with the 40% non-controlling interests in the methanol facility in Egypt and changes in non-cash working capital, were $103.6 million in the third quarter of 2011 compared with $86.5 million for the second quarter of 2011 and $64.7 million for the third quarter of 2010. The change in Adjusted cash flows from operating activities in the third quarter of 2011 compared with the second quarter of 2011 and the third quarter of 2010 is primarily a result of changes in Adjusted EBITDA, excluding share based compensation expense (recovery). Refer to the Supplemental Non-IFRS Measures section on page 12 for a reconciliation of Adjusted cash flows from operating activities to the most comparable IFRS measure.

During the third quarter of 2011, we paid a quarterly dividend of $0.17 per share, or $16 million.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 9
MANAGEMENT’S DISCUSSION AND ANALYSIS

The Egypt limited recourse debt facilities required that certain conditions associated with plant construction and commissioning be met by September 30, 2011 (“project completion”). Project completion was achieved during the third quarter of 2011. In connection with achieving project completion, we agreed to a covenant to complete by March 31, 2012 certain land title registrations and related mortgages which require action by Egyptian government entities. We do not believe that the finalization of these items is material and will seek a waiver from the lenders if not completed by March 31, 2012. We cannot assure you that the land title registrations and related mortgages will be finalized by March 31, 2012 or that we would be able to obtain a waiver from the lenders.

During the third quarter of 2011, a debt principal payment of $16.1 million was paid on the Egypt credit facility and $29 million (Methanex share $17 million) was contributed to fund the related debt service reserve account.

At September 30, 2011, management believes the Company was in compliance with all of the covenants and default provisions related to its long-term debt obligations.

We have agreements in place to participate in or support natural gas exploration and development in southern Chile and during the third quarter of 2011, we spent $4 million to support these initiatives.

We operate in a highly competitive commodity industry and believe it is appropriate to maintain a conservative balance sheet and to maintain financial flexibility. Our cash balance at September 30, 2011 was $261 million. We have a strong balance sheet and an undrawn $200 million credit facility provided by highly rated financial institutions that was extended early in the third quarter of 2011 to mid-2015. We intend to refinance the $200 million notes due August 2012. We invest our cash only in highly rated instruments that have maturities of three months or less to ensure preservation of capital and appropriate liquidity. Our planned capital maintenance expenditure program directed towards major maintenance, turnarounds and catalyst changes for existing operations, is currently estimated to total approximately $70 million for the period to the end of 2012.

We believe we are well positioned to meet our financial commitments and continue to invest to grow the Company.

SHORT-TERM OUTLOOK

As we enter the fourth quarter, despite recent elevated concerns around the global economic outlook, we have not seen any significant impact on global methanol demand.

We increased our production in 2011 with the new 1.26 million tonne per year methanol facility in Egypt and our 470,000 tonne per year plant in Medicine Hat, Alberta. These facilities are operating well and have increased our earnings capability. This will be partially offset in the short-term by the impact of our Atlas facility producing at reduced rates until the next scheduled turnaround currently planned for early 2012.

The methanol price will ultimately depend on the strength of the global economy, industry operating rates, global energy prices, new supply additions, the rate of industry restructuring and the strength of global demand. We believe that our financial position and financial flexibility, outstanding global supply network and competitive-cost position will provide a sound basis for Methanex to continue to be the leader in the methanol industry and to invest to grow the Company.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 10
MANAGEMENT’S DISCUSSION AND ANALYSIS

CONTROLS AND PROCEDURES

For the three months ended September 30, 2011, no changes were made in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Transition from Canadian generally accepted accounting principles (Canadian GAAP) to IFRS

The first quarter of 2011 ended March 31, 2011 with comparative financial results for 2010 was our first interim period reported under IFRS. All comparative figures in this third quarter interim report have been restated to be in accordance with IFRS, unless specifically noted otherwise.

Our financial statements were prepared in accordance with Canadian GAAP until December 31, 2010. While IFRS uses a conceptual framework similar to Canadian GAAP, there are significant differences in recognition, measurement and disclosures. In our MD&A in the 2010 Annual Report, we disclosed the significant impacts on transition to IFRS. The disclosure in our MD&A in the 2010 Annual Report is consistent with the impacts disclosed in the condensed consolidated interim financial statements. For a description of the significant accounting policies the Company has adopted under IFRS, including the estimates and judgments we consider most significant in applying those accounting policies, please refer to note 2 of the condensed consolidated interim financial statements included in the interim report for the three months ended March 31, 2011.

The adoption of IFRS resulted in some changes to the consolidated balance sheets and income statements of the Company previously reported under Canadian GAAP. To help users of the financial statements better understand the impact of the adoption of IFRS on the Company, we have provided reconciliations from Canadian GAAP to IFRS for total assets, liabilities, and equity, as well as net income and comprehensive income for the comparative reporting periods. Please refer to note 12 of the condensed consolidated interim financial statements for the reconciliations between IFRS and Canadian GAAP for the period ended September 30, 2010 and refer to note 18 of the condensed consolidated interim financial statements for the period ended March 31, 2011 for the reconciliations between IFRS and Canadian GAAP at the date of transition, January 1, 2010 and for the year ended December 31, 2010.

IFRS 1 First-time Adoption of International Financial Reporting Standards

Adoption of IFRS requires the application of IFRS 1, First-time Adoption of International Financial Reporting Standards, which provides guidance for an entity’s initial adoption of IFRS. IFRS 1 gives entities adopting IFRS for the first time a number of optional exemptions and mandatory exceptions, in certain areas, to the general requirement for full retrospective application of IFRS. In our MD&A in the 2010 Annual Report, we disclosed the optional exemptions available under IFRS 1 that we elected on transition to IFRS. The elections as previously disclosed are consistent with the elections as disclosed in the condensed consolidated interim financial statements. Please refer to note 12 of the condensed consolidated interim financial statements for a detailed description of the IFRS 1 exemptions we elected to apply.

IFRS Conversion

Our plan to convert our consolidated financial statements to IFRS at the change over date of January 1, 2011 with comparative financial results included a formal project governance structure that included the Audit, Finance and Risk Committee, senior management, and an IFRS steering committee to monitor progress and review and approve recommendations. The IFRS transition plan progressed according to schedule and was comprehensive and addressed topics such as the impact of IFRS on accounting policies and implementation decisions, infrastructure, business activities, compensation matters and control activities.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 11
MANAGEMENT’S DISCUSSION AND ANALYSIS

Anticipated changes to IFRS

Consolidation and Joint Arrangement Accounting

In May 2011, the IASB issued new accounting standards related to consolidation and joint arrangement accounting. The IASB has revised the definition of “control,” which is a criterion for consolidation accounting. In addition, changes to IFRS in the accounting for joint arrangements were issued which, under certain circumstances, removed the option for proportionate accounting so that the equity method of accounting for such interests would need to be applied. The impact of applying consolidation accounting or equity accounting does not result in any change to net earnings or shareholders’ equity, but would result in a significant presentation impact. We are currently assessing the impact of these standards on our financial statements. The effective date for these standards is for periods commencing on or after January 1, 2013, with earlier adoption permitted.

Leases

As part of their global conversion project, the International Accounting Standards Board (IASB) and the U.S. Financial Accounting Standards Board (“FASB”) issued a joint Exposure Draft proposing that lessees would be required to recognize all leases on the statement of financial position. We have a fleet of ocean-going vessels under time charter agreements with terms of up to 15 years, which are currently accounted for as operating leases. The proposed rules would require these time charter agreements to be recorded on the Consolidated Statements of Financial Position, resulting in a material increase to total assets and liabilities. The IASB and FASB currently expect to issue a final standard in 2012.

ADDITIONAL INFORMATION — SUPPLEMENTAL NON-IFRS MEASURES

In addition to providing measures prepared in accordance with International Financial Reporting Standards (IFRS), we present certain supplemental non-IFRS measures. These are Adjusted EBITDA and Adjusted cash flows from operating activities. These measures do not have any standardized meaning prescribed by IFRS and therefore are unlikely to be comparable to similar measures presented by other companies. These supplemental non-IFRS measures are provided to assist readers in determining our ability to generate cash from operations. We believe these measures are useful in assessing operating performance and liquidity of the Company’s ongoing business on an overall basis. We also believe Adjusted EBITDA is frequently used by securities analysts and investors when comparing our results with those of other companies.

These measures should be considered in addition to, and not as a substitute for, net income, cash flows and other measures of financial performance and liquidity reported in accordance with IFRS.

Adjusted EBITDA (attributable to Methanex shareholders)

Adjusted EBITDA differs from the most comparable IFRS measure, cash flows from operating activities, because it does not include changes in non-cash working capital, other cash payments related to operating activities, other non-cash items, taxes paid, finance income and other expenses, and Adjusted EBITDA associated with the 40% non-controlling interest in the methanol facility in Egypt and because cash flows from operating activities does not include share-based compensation expense.

The following table shows a reconciliation of cash flows from operating activities to Adjusted EBITDA:

		Three Months Ended												Nine Months Ended
		Sep 30				Jun 30				Sep 30				Sep 30				Sep 30
($ thousands)		2011				2011				2010				2011				2010
Cash flows from operating activities		$	119,119			$	77,634			$	61,360			$	321,273			$	169,826
Add (deduct):
Net (income) loss attributable to non-controlling interests			(12,281	)			(6,220	)			401				(17,425	)			1,791
Changes in non-cash working capital			5,722				22,227				3,510				(16,537	)			39,146
Other cash payments, including share-based compensation			1,823				1,662				1,763				8,819				5,885
Share-based compensation recovery (expense)			20,489				(1,660	)			(8,828	)			8,749				(17,927	)
Other non-cash items			2,372				(1,392	)			(5,969	)			949				(7,277	)
Income taxes paid			4,992				20,735				2,720				32,396				8,931
Finance income and other expenses			1,585				(1,284	)			1,472				(4,558	)			133
Non-controlling interests adjustment 1			(9,046	)			(8,038	)			(576	)			(17,295	)			(1,469	)
Adjusted EBITDA (attributable to Methanex shareholders)		$	134,775			$	103,664			$	55,853			$	316,371			$	199,039

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 12
MANAGEMENT’S DISCUSSION AND ANALYSIS

Adjusted Cash Flows from Operating Activities (attributable to Methanex shareholders)

Adjusted cash flows from operating activities differs from the most comparable IFRS measure, cash flows from operating activities, because it does not include changes in non-cash working capital and cash flows associated with the 40% non-controlling interest in the methanol facility in Egypt.

The following table shows a reconciliation of cash flows from operating activities to Adjusted cash flows from operating activities:

		Three Months Ended												Nine Months Ended
		Sep 30				Jun 30				Sep 30				Sep 30				Sep 30
($ thousands)		2011				2011				2010				2011				2010
Cash flows from operating activities		$	119,119			$	77,634			$	61,360			$	321,273			$	169,826
Add (deduct) non-controlling interest adjustment:
Net (income) loss			(12,281	)			(6,220	)			401				(17,425	)			1,791
Non-cash items			(8,992	)			(7,180	)			(571	)			(16,886	)			(1,456	)
Changes in non-cash working capital			5,722				22,227				3,510				(16,537	)			39,146
Adjusted cash flows from operating activities (attributable to Methanex shareholders)		$	103,568			$	86,461			$	64,700			$	270,425			$	209,307

QUARTERLY FINANCIAL DATA (UNAUDITED)

A summary of selected financial information for the prior eight quarters is as follows:

		Three Months Ended
		Sep 30				Jun 30				Mar 31				Dec 31
($ thousands, except per share amounts)		2011				2011				2011				20101
Revenue		$	669,702			$	622,829			$	619,007			$	570,337
Net income2			62,316				40,529				34,610				27,009
Net income before unusual item2			62,316				40,529				34,610				27,009
Basic net income per common share2			0.67				0.44				0.37				0.29
Basic net income per common share before unusual item2			0.67				0.44				0.37				0.29
Diluted net income per common share2			0.59				0.43				0.37				0.29
Diluted net income per common share before unusual item2			0.59				0.43				0.37				0.29

		Three Months Ended
		Sep 30				Jun 30				Mar 31				Dec 31
($ thousands, except per share amounts)		20101				20101				20101				20093
Revenue		$	480,997			$	448,543			$	466,706			$	381,729
Net income 2			28,662				14,804				27,045				25,718
Net income before unusual item2			6,439				14,804				27,045				25,718
Basic net income per common share2			0.31				0.16				0.29				0.28
Basic net income per common share before unusual item2			0.07				0.16				0.29				0.28
Diluted net income per common share2			0.31				0.15				0.29				0.28
Diluted net income per common share before unusual item2			0.07				0.15				0.29				0.28

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 13
MANAGEMENT’S DISCUSSION AND ANALYSIS

FORWARD-LOOKING INFORMATION WARNING

This Third Quarter 2011 Management’s Discussion and Analysis (“MD&A”) as well as comments made during the Third Quarter 2011 investor conference call contain forward-looking statements with respect to us and our industry. Statements that include the words “believes,” “expects,” “may,” “will,” “should,” “intends,” “plans,” “estimates,” “anticipates,” or other comparable terminology and similar statements of a future or forward-looking nature identify forward-looking statements.

More particularly and without limitation, any statements regarding the following are forward-looking statements:

•

expected demand for methanol and its derivatives,

•

expected new methanol supply and timing for start-up of the same,

•

expected shut downs (either temporary or permanent) or re-starts of existing methanol supply (including our own facilities), including, without limitation, timing of planned maintenance outages,

•

expected methanol and energy prices,

•

expected levels and timing of natural gas supply to each of our plants, including without limitation, levels of natural gas supply from investments in natural gas exploration and development in Chile and New Zealand and availability of economically priced natural gas in Chile, New Zealand and Canada,

•

capital committed by third parties towards future natural gas exploration in Chile and New Zealand,

•

expected capital expenditures, including without limitation, those to support natural gas exploration and development in Chile and New Zealand and the restart of our idled methanol facilities,

•

anticipated production rates of our plants, including without limitation, our Chilean facilities, the new methanol plant in Egypt and the restarted Medicine Hat facility,

•

expected operating costs, including natural gas feedstock costs and logistics costs,

•

expected tax rates or resolutions to tax disputes,

•

expected cash flows and earnings capability,

•

ability to meet covenants or obtain waivers associated with our long-term debt obligations, including without limitation, the Egypt limited recourse debt facilities which have conditions associated with finalization of certain land title registration and related mortgages which require actions by Egyptian governmental entities,

•

availability of committed credit facilities and other financing,

•

shareholder distribution strategy and anticipated distributions to shareholders,

•

commercial viability of, or ability to execute, future projects, capacity expansions, plant relocations, or other business initiatives or opportunities,

•

financial strength and ability to meet future financial commitments,

•

expected global or regional economic activity (including industrial production levels),

•

expected actions of governments, gas suppliers, courts, tribunals or other third parties, and

•

expected impact on our results of operations in Egypt and our financial condition as a consequence of actions taken by the Government of Egypt and its agencies.

We believe that we have a reasonable basis for making such forward-looking statements. The forward-looking statements in this document are based on our experience, our perception of trends, current conditions and expected future developments as well as other factors. Certain material factors or assumptions were applied in drawing the conclusions or making the forecasts or projections that are included in these forward-looking statements, including, without limitation, future expectations and assumptions concerning the following:

•

supply of, demand for, and price of, methanol, methanol derivatives, natural gas, oil and oil derivatives,

•

success of natural gas exploration in Chile and New Zealand and our ability to procure economically priced natural gas in Chile, New Zealand and Canada,

•

production rates of our facilities, including without limitation, our Chilean facilities, the new methanol plant in Egypt and the restarted Medicine Hat facility,

•

receipt or issuance of third party consents or approvals, including without limitation, governmental registrations of land title and related mortgages in Egypt, governmental approvals related to natural gas exploration rights, rights to purchase natural gas or the establishment of new fuel standards,

•

operating costs including natural gas feedstock and logistics costs, capital costs, tax rates, cash flows, foreign exchange rates and interest rates,

•

availability of committed credit facilities and other financing,

•

global and regional economic activity (including industrial production levels),

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 14
MANAGEMENT’S DISCUSSION AND ANALYSIS

•

absence of a material negative impact from major natural disasters,

•

absence of a material negative impact from changes in laws or regulations,

•

absence of material negative impact from political instability in the countries in which we operate, and

•

enforcement of contractual arrangements and ability to perform contractual obligations by customers, suppliers and other third parties.

However, forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the forward-looking statements. The risks and uncertainties primarily include those attendant with producing and marketing methanol and successfully carrying out major capital expenditure projects in various jurisdictions, including without limitation:

•

conditions in the methanol and other industries, including fluctuations in supply, demand and price for methanol and its derivatives, including demand for methanol for energy uses,

•

the price of natural gas, oil and oil derivatives,

•

the success of natural gas exploration and development activities in southern Chile and New Zealand and our ability to obtain any additional gas in Chile, New Zealand, and Canada on commercially acceptable terms,

•

the ability to successfully carry out corporate initiatives and strategies,

•

actions of competitors, suppliers, and financial institutions,

•

actions of governments and governmental authorities, including without limitation, implementation of policies or other measures that could impact the supply or demand for methanol or its derivatives,

•

changes in laws or regulations,

•

import or export restrictions, anti-dumping measures, increases in duties, taxes and government royalties, and other actions by governments that may adversely affect our operations or existing contractual arrangements,

•

world-wide economic conditions, and

•

other risks described in our 2010 Management’s Discussion and Analysis and this Third Quarter 2011 Management’s Discussion and Analysis.

Having in mind these and other factors, investors and other readers are cautioned not to place undue reliance on forward-looking statements. They are not a substitute for the exercise of one’s own due diligence and judgment. The outcomes anticipated in forward-looking statements may not occur and we do not undertake to update forward-looking statements except as required by applicable securities laws.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 15
MANAGEMENT’S DISCUSSION AND ANALYSIS

HOW WE ANALYZE OUR BUSINESS

Our operations consist of a single operating segment — the production and sale of methanol. We review our results of operations by analyzing changes in the components of our adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) (refer to the Supplemental Non-IFRS Measures section on page 12 for a reconciliation to the most comparable IFRS measure), depreciation and amortization, finance costs, finance income and other expenses, and income taxes.

In addition to the methanol that we produce at our facilities (“Methanex-produced methanol”), we also purchase and re-sell methanol produced by others (“purchased methanol”) and we sell methanol on a commission basis. We analyze the results of all methanol sales together, excluding commission sales volumes. The key drivers of change in our Adjusted EBITDA are average realized price, cash costs and sales volume which are defined and calculated as follows:

PRICE		The change in our Adjusted EBITDA as a result of changes in average realized price is calculated as the difference from period to period in the selling price of methanol multiplied by the current period total methanol sales volume excluding commission sales volume plus the difference from period to period in commission income.

CASH COST		The change in our Adjusted EBITDA as a result of changes in cash costs is calculated as the difference from period to period in cash costs per tonne multiplied by the current period total methanol sales volume excluding commission sales volume. The cash costs per tonne is the weighted average of the cash cost per tonne of Methanex-produced methanol and the cash cost per tonne of purchased methanol. The cash cost per tonne of Methanex-produced methanol includes absorbed fixed cash costs per tonne and variable cash costs per tonne. The cash cost per tonne of purchased methanol consists principally of the cost of methanol itself. In addition, the change in our Adjusted EBITDA as a result of changes in cash costs includes the changes from period to period in unabsorbed fixed production costs, consolidated selling, general and administrative expenses and fixed storage and handling costs.

VOLUME		The change in our Adjusted EBITDA as a result of changes in sales volume is calculated as the difference from period to period in total methanol sales volume excluding commission sales volumes multiplied by the margin per tonne for the prior period. The margin per tonne for the prior period is the weighted average margin per tonne of Methanex-produced methanol and margin per tonne of purchased methanol. The margin per tonne for Methanex-produced methanol is calculated as the selling price per tonne of methanol less absorbed fixed cash costs per tonne and variable cash costs per tonne. The margin per tonne for purchased methanol is calculated as the selling price per tonne of methanol less the cost of purchased methanol per tonne.

We own 63.1% of the Atlas methanol facility and market the remaining 36.9% through a commission offtake agreement. We account for this investment using proportionate consolidation which results in 63.1% of the revenues and expenses being included in our financial statements with the remaining 36.9% portion included as commission income.

We own 60% of the 1.26 million tonne per year Egypt methanol facility and market the remaining 40% through a commission offtake agreement. We account for this investment using consolidation accounting, which results in 100% of the revenues and expenses being included in our financial statements with the other investors’ interest in the methanol facility being presented as “non-controlling interests”. For purposes of analyzing our results, we analyze Adjusted EBITDA and Adjusted cash flows from operating activities excluding the amounts associated with the other investors’ 40% non-controlling interest and include these results in commission income on a consistent basis with how we present the Atlas facility.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 16
MANAGEMENT’S DISCUSSION AND ANALYSIS

Methanex Corporation

Consolidated Statements of Income (unaudited)
(thousands of U.S. dollars, except number of common shares and per share amounts)

		Three Months Ended								Nine Months Ended
		Sep 30				Sep 30				Sep 30				Sep 30
		2011				2010				2011				2010
Revenue		$	669,702			$	480,997			$	1,911,538			$	1,396,246
Cost of sales and operating expenses (note 6)			(513,600	)			(424,969	)			(1,560,447	)			(1,197,529	)
Depreciation and amortization (note 6)			(43,696	)			(34,991	)			(113,109	)			(105,520	)
Gain on sale of Kitimat assets			—				22,223				—				22,223
Operating income			112,406				43,260				237,982				115,420
Finance costs (note 7)			(17,386	)			(7,636	)			(43,929	)			(23,252	)
Finance income and other expenses			(1,585	)			(1,472	)			4,558				(133	)
Profit before income tax expense			93,435				34,152				198,611				92,035
Income tax expense:
Current			(10,802	)			(6,741	)			(27,344	)			(19,149	)
Deferred			(8,036	)			850				(16,387	)			(4,166	)
			(18,838	)			(5,891	)			(43,731	)			(23,315	)
Net income		$	74,597			$	28,261			$	154,880			$	68,720
Attributable to:
Methanex Corporation shareholders			62,316				28,662				137,455				70,511
Non-controlling interests			12,281				(401	)			17,425				(1,791	)
		$	74,597			$	28,261			$	154,880			$	68,720
Income for the period attributable to Methanex Corporation shareholders
Basic net income per common share (note 8)		$	0.67			$	0.31			$	1.48			$	0.76
Diluted net income per common share (note 8)		$	0.59			$	0.31			$	1.38			$	0.75
Basic net income per common share before unusual item (note 8)		$	0.67			$	0.07			$	1.48			$	0.52
Diluted net income per common share before unusual item (note 8)		$	0.59			$	0.07			$	1.38			$	0.51
Weighted average number of common shares outstanding			93,202,401				92,209,089				92,954,844				92,174,766
Diluted weighted average number of common shares outstanding			94,441,681				93,339,322				94,404,262				93,371,364

See accompanying notes to condensed consolidated interim financial statements.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 17
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Methanex Corporation
Consolidated Statements of Comprehensive Income (unaudited)
(thousands of U.S. dollars, except number of common shares and per share amounts)

		Three Months Ended								Nine Months Ended
		Sep 30				Sep 30				Sep 30				Sep 30
		2011				2010				2011				2010
Net income		$	74,597			$	28,261			$	154,880			$	68,720
Other comprehensive income (loss):
Change in fair value of forward exchange contracts, net of tax			634				—				(35	)			—
Change in fair value of interest rate swap contracts, net of tax			4,103				(11,169	)			(3,607	)			(29,939	)
Interest rate swap cash settlement reclassified to interest expense			7,951				—				8,821				—
Interest rate swap cash settlement reclassified to property, plant and equipment			—				8,177				7,279				15,682
			12,688				(2,992	)			12,458				(14,257	)
Comprehensive income		$	87,285			$	25,269			$	167,338			$	54,463
Attributable to:
Methanex Corporation shareholders			70,183				26,866				144,916				61,955
Non-controlling interests			17,102				(1,597	)			22,422				(7,492	)
		$	87,285			$	25,269			$	167,338			$	54,463

See accompanying notes to condensed consolidated interim financial statements.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 18
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Methanex Corporation
Consolidated Statements of Financial Position (unaudited)
(thousands of U.S. dollars)

		Sep 30				Dec 31
		2011				2010
ASSETS
Current assets:
Cash and cash equivalents		$	260,975			$	193,794
Trade and other receivables			336,654				320,027
Inventories			245,129				229,657
Prepaid expenses			31,006				26,877
			873,764				770,355
Non-current assets:
Property, plant and equipment (note 3)			2,224,328				2,258,576
Other assets			146,762				113,263
			2,371,090				2,371,839
		$	3,244,854			$	3,142,194
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Trade, other payables and accrued liabilities		$	282,029			$	259,039
Current maturities on long-term debt (note 5)			251,106				49,965
Current maturities on finance leases			6,561				11,570
Current maturities on other long-term liabilities			12,075				9,677
			551,771				330,251
Non-current liabilities:
Long-term debt (note 5)			659,489				896,976
Finance leases			57,706				67,842
Other long-term liabilities			118,968				140,570
Deferred income tax liabilities			301,485				295,431
			1,137,648				1,400,819
Equity:
Capital stock			454,934				440,092
Contributed surplus			22,231				25,393
Retained earnings			906,718				815,320
Accumulated other comprehensive loss			(18,632	)			(26,093	)
Shareholders’ equity			1,365,251				1,254,712
Non-controlling interests			190,184				156,412
Total equity			1,555,435				1,411,124
		$	3,244,854			$	3,142,194

See accompanying notes to condensed consolidated interim financial statements.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 19
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)

Methanex Corporation
Consolidated Statements of Changes in Equity (unaudited)
(thousands of U.S. dollars, except number of common shares)

																		Accumulated
		Number of																Other								Non-
		Common				Capital				Contributed				Retained				Comprehensive				Shareholders’				Controlling				Total
		Shares				Stock				Surplus				Earnings				Loss				Equity				Interests				Equity
Balance, January 1, 2010			92,108,242			$	427,792			$	26,981			$	776,139			$	(19,910	)		$	1,211,002			$	137,272			$	1,348,274
Net income (loss)			—				—				—				70,511				—				70,511				(1,791	)			68,720
Other comprehensive (loss)			—				—				—				—				(8,556	)			(8,556	)			(5,701	)			(14,257	)
Compensation expense recorded for stock options			—				—				1,176				—				—				1,176				—				1,176
Issue of shares on exercise of stock options			124,975				1,400				—				—				—				1,400				—				1,400
Reclassification of grant date fair value on exercise of stock options			—				522				(522	)			—				—				—				—				—
Dividend payments to Methanex Corporation shareholders			—				—				—				(42,869	)			—				(42,869	)			—				(42,869	)
Dividend payments to non-controlling interests			—				—				—				—				—				—				(750	)			(750	)
Capital contributions by non-controlling interests			—				—				—				—				—				—				18,400				18,400
Balance, September 30, 2010			92,233,217				429,714				27,635				803,781				(28,466	)			1,232,664				147,430				1,380,094
Net income (loss)			—				—				—				27,009				—				27,009				(199	)			26,810
Other comprehensive income (loss)			—				—				—				(1,139	)			2,373				1,234				1,581				2,815
Compensation expense recorded for stock options			—				—				299				—				—				299				—				299
Issue of shares on exercise of stock options			398,805				7,837				—				—				—				7,837				—				7,837
Reclassification of grant date fair value on exercise of stock options			—				2,541				(2,541	)			—				—				—				—				—
Dividend payments to Methanex Corporation shareholders			—				—				—				(14,331	)			—				(14,331	)			—				(14,331	)
Capital contributions non-controlling interests			—				—				—				—				—				—				7,600				7,600
Balance, December 31, 2010			92,632,022				440,092				25,393				815,320				(26,093	)			1,254,712				156,412				1,411,124
Net income			—				—				—				137,455				—				137,455				17,425				154,880
Other comprehensive income			—				—				—				—				7,461				7,461				4,997				12,458
Compensation expense recorded for stock options			—				—				657				—				—				657				—				657
Issue of shares on exercise of stock options			585,798				11,023				—				—				—				11,023				—				11,023
Reclassification of grant date fair value on exercise of stock options			—				3,819				(3,819	)			—				—				—				—				—
Dividend payments to Methanex Corporation shareholders			—				—				—				(46,057	)			—				(46,057	)			—				(46,057	)
Dividends paid and payable to non-controlling interests			—				—				—				—				—				—				(7,850	)			(7,850	)
Capital contributions non-controlling interests			—				—				—				—				—				—				19,200				19,200
Balance, September 30, 2011			93,217,820			$	454,934			$	22,231			$	906,718			$	(18,632	)		$	1,365,251			$	190,184			$	1,555,435

See accompanying notes to condensed consolidated interim financial statements.

METHANEX CORPORATION 2011 THIRD QUARTER REPORT		PAGE 20
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (UNAUDITED)