EM LATAM CREDIT: Alpek: 3Q 2025 Earnings - Neutral
(ALPEKA; Baa3neg/BBB-/BBB-neg)
• Mexico chemicals processor Alpeka announced uninspiring earnings as volumes and revenues were flat. On the positive side the company managed an increase in EBITDA QoQ through cost cutting as well as generated free cash flow and reduced debt sequentially.
• Unfortunately, EBITDA dropped 41% YoY and TTM EBITDA was much lower with relatively flat net debt YoY that resulted in a much higher net debt leverage of 4x vs 3.1x a year ago.
• ALPEKA 31s were last quoted T+262bp, 59bp wider since June 30th and 88bp wider YTD. The company should have some more time to reduce debt more in line with rating agency expectations since the move to negative outlooks was fairly recent.
• Alpek is taking some strong steps to control costs. The company closed 4 plants this year and will look to sell them to raise cash and reduce debt.
• Oversupply has plagued the market. Higher import taxes on PET should help the competitive price environment next year; however, lower shipping costs are currently making it cheaper for importers so that’s negative. Also, there is already a supply overhang from heavy importing the first nine months of this year that will have to be worked off.
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Historical bullets
AUDUSD TECHS: Recent Pullback Appears Corrective
- RES 4: 0.6793 1.500 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 3: 0.6763 1.382 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 2: 0.6726 1.236 proj of the Jun 23 - Jul 24 - Aug 21 price swing
- RES 1: 0.6660/6707 High Sep 18 / 17
- PRICE: 0.6583 @ 21:01 BST Sep 24
- SUP 1: 0.6575/6551 Low Sep 22 / 50-day EMA
- SUP 2: 0.6527 61.8% retracement of the Aug 21 - Sep 17 bull leg
- SUP 3: 0.6463/6415 Low Aug 27 / Low Aug 21 / 22 and a bear trigger
- SUP 4: 0.6373 Low Jun 23
The AUDUSD uptrend remains intact and the latest pullback is considered corrective - for now. The recent rally plus the breach of 0.6625, the Jul 24 high and bull trigger, confirmed a resumption of the uptrend. The climb opens 0.6726 next, a Fibonacci projection. MA studies are in a bull-mode position highlighting a dominant uptrend. Key support to watch is 0.6415, the Aug 21 / 22 low. Initial firm support to watch is 0.6551, the 50-day EMA.
EURJPY TECHS: Fresh Cycle High
- RES 4: 177.08 2.000 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 3: 175.43 High Jul 11 ‘24 and a key medium-term resistance
- RES 2: 174.86 1.764 proj of the Feb 28 - Mar 18 - Apr 7 price swing
- RES 1: 174.74 High Sep 24
- PRICE: 174.71 @ 20:57 BST Sep 24
- SUP 1: 173.26/172.03 20- and 50-day EMA
- SUP 2: 170.97 Low Aug 14
- SUP 3: 169.73/45 Low Jul 31 / 23.6% of the Feb 28 - Jul 28 bull leg
- SUP 4: 168.46 Low Jul 1
The trend set-up in EURJPY is unchanged, it remains bullish and the cross has traded to a fresh cycle. This confirms a resumption of the uptrend and maintains the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull-mode too, highlighting a dominant uptrend. Sights are on 174.86, a Fibonacci projection. On the downside, first support to watch lies at 173.26, the 20-day EMA.
AUSSIE 10-YEAR TECHS: (Z5) Reversal Lower Extends
- RES 3: 95.960 - High Apr 7 (cont.)
- RES 2: 95.875 - High Jul 2 (cont.)
- RES 1: 95.780 - High Sep 12, 18 and 19
- PRICE: 95.625 @ 20:42 BST Sep 24
- SUP 1: 95.510 - Low Sep 3
- SUP 2: 95.415/95.300 - Low May 15 / Low Jan 14
- SUP 3: 95.275 - Low Nov 14 (cont) and a key support
Aussie 10-yr futures are trading lower. It is still possible that the move down is a correction. Near-term resistance to watch is 95.780, the Sep 12 high. A clear break of this level would signal scope for a continuation higher and open 95.875, the Jul 2 high on the continuation chart. On the downside, key short-term support has been defined at 95.510, the Sep 3 low. Clearance of this level would instead be bearish.
