Implementation Of “New Normal” Has Yet To Leave Significant Impact In Indonesia PE Market
- Some traders applied different pricing strategy on local PE offers to lure buyers
- Limited supply for LLDPE Film C4 in the domestic market persists
- The current PE prices expected to sustain, demand outlook remain blurry
Market sources contacted by SSESSMENTS.COM cited that the implementation of “new normal” has yet to leave a significant impact in Indonesia PE market. On the week starting July 6, the leading Indonesian polyolefins producer decided to maintain a stable offer level for mLLDPE C6, and HDPE grades except for HDPE Blow Moulding that increased by IDR140,000/ton ($9/ton). This week, the producer also raised the prices for LLDPE Film C4 by IDR150,000/ton ($10/ton). However, some players stated that the producer is having no spot offers for LLDPE Film C4 due to backlog orders coupled with production issues. From traders’ end, some maintained the offers stable for local HDPE grades and LLDPE Film C4, some others had to reduce the offers for local HDPE Film and LLDPE Film C4 by IDR150,000/ton ($10/ton) to lure buyers. On the other side, another trader increased the local offers for HDPE Film and LLDPE Film C4 between IDR200,000-300,000/ton ($14-21/ton). For localized cargoes, a Thai PE producer is offering in Rupiah denomination at IDR300,000/ton ($21/ton) higher for HDPE Film and LLDPE Film C4 and at stable level for LDPE Film. From Malaysia, localized offers for LLDPE Film C4 went up by IDR100,000/ton ($7/ton). All price changes on a weekly comparison. Moreover, a converter reported receiving localized LDPE Film cargoes of Malaysia origin at IDR1,450,000/ton ($100/ton) higher than two weeks ago. At the same time, the converter also received localized Malaysian HDPE Film and LLDPE Film at stable levels as compared to the same period. For deals, a manufacturer managed to secure some volume of local LLDPE Film C4 via a trader with deals closed at IDR300,000/ton ($21/ton) lower than the initial offer levels.
In the import market, a Thai PE producer kept the stable offers for HDPE grades, LDPE Film and LLDPE Film. Likewise, an Indonesian trader received rollover prices for import Saudi and US HDPE Film, as well as Singapore and US LLDPE Film C4 cargoes. All compared to last week’s level. Particularly for US cargoes, the materials are already available in Port Klang, Malaysia, yet, the trader is not considering taking the cargoes since the prices were deemed unacceptable. Whilst a global trading house revealed that US LLDPE Film C4 were hiked by $40/ton. Buyers’ bids at $825/ton, or $45/ton lower than the initial offers were rejected by the trader. From the Philippines, the trader also mentioned that import offers for LLDPE Film C4 surged by $70/ton. Both compared to early June. From the converters' side, one of them reported receiving Singaporean HDPE Blow Moulding at $100/ton higher than last month’s level and Malaysian LDPE Film at $50/ton higher from the same period. Another converter informed that Middle Eastern HDPE Film and US LLDPE Film C4 have emerged with an increment of around $75/ton on month-on-month comparison. The converter decided to purchase both cargoes at $10/ton lower than the initial offers, as told to SSESSMENTS.COM.
As reported to SSESSMENTS.COM, the overall demand for PE resins in Indonesia’s domestic market remains sluggish this week despite the slight improvement on several traders’ end. No significant improvement observed from the implementation of “new normal”. In fact, this week’s sales for PE resins are slightly down from last week as most converters already finished with the replenishment activities. Similar to resins, no improvement seen as well in end-products sales. However, demand for plastic bags is still ongoing despite the regulation to ban single plastic bag usage implemented by the Jakarta government as of July 1. On the supply side, some traders reported having limited supply for all PE grades on their end. Meanwhile, tight supply for LLDPE Film C4 in the domestic market persists even though Chandra Asri Petrochemical (CAP)’s 400,000 tons/year LLDPE plant started running normally since July 1. The reason behind this is because the producer was just able to produce prime grade LLDPE within this week.
Looking ahead, the majority of market players contacted by SSESSMENTS.COM believe that local and import PE prices will hover or are likely to increase considering low stockpiles in the market and firm ethylene prices. In terms of demand, the outlook remains blurry but players hope that Indonesia’s PE market will gradually become better in-line with “new normal” conditions.
