NewsSSESSMENTS: Indonesian Government To Implement New Regulations For Recycled PET, Procedure Remain In Question

As reported to SSESSMENTS.COM, in 2020, the Indonesian government will impose new regulations for converters to use recycled PET at least 10% of their total production. However, PET converters draw concern about health issues caused by the used of recycled PET for food and beverage packaging. Besides, recycled PET price is higher than the virgin PET and production cost for recycled PET is costlier. 

With regards to the market condition in the country, an Indonesian converter shared with SSESSMENTS.COM that domestic demand for PET continues to soften as the rainy season starts to hit the country and demand for beverage and mineral waters is slowing down. Local offers for PET Bottle declined between IDR300,000-600,000/ton ($21-42/ton) compared to last week’s level. While import offers from some Chinese producers are around $830-850/ton on LC at sight, CIF Indonesia main port basis. China has been offering at low prices especially for PET resin with viscosity index (VI) below 76% without 5% customs duty, as the trade war between the world's two largest economies continued to simmer this year. However, buyers were unwilling to take the materials as it cannot be used for by manufactures of beverage and mineral water bottles. On the supply side, local inventory remains ample and predicted to be the same for the rest of the year with no delivery issue reported.  

Looking ahead, the converter opined that import PET price would not go lower than $800/ton-level as the producers may consider to scale back operating rate if the prices reach that level. In December, demand is predicted to improve but it would not cause significant changes in PET prices. The upcoming Chinese New Year does not lend enough support for PET demand so far, “Demand for the Chinese New Year preparation will not be that strong as last year, even now is already too late to prepare,” the converter told SSESSMENTS.COM.

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