NewsSSESSMENTS: Indonesian Players Comment On LLDPE Plant Shutdown Experienced By Chandra Asri Petrochemical And Its Impact On The Market

On June 24, market sources informed that the LLDPE plant with an annual capacity of 400,000 tons owned by Indonesia’s Chandra Asri Petrochemical (CAP) which had just resumed operations on June 22 morning experienced an outage again in the afternoon. Detailed information gathered by SSESSMENTS.COM's team shows that this plant is used to produce LLDPE Film C4 and LLDPE Roto 3840. The LLDPE plant has been shut down since before June 8, so the latest outage exhibited a serious problem, hence, sources claimed that the producer decided to cancel the restart-up until some time in the future. At the time of publication, the producer could not be immediately reached for comment.

Comments by market players on the subject as follows:

“On our end, a lot of cargoes are yet to be delivered by CAP, with the producer also having a high volume of backlogs to their other contract customers. Contract LLDPE grades between producer to customers for Q3 2020 thus decided being cut by 30% from normal volume. From the producer's end, they don’t have spot offers for LLDPE grades as the producer won’t have materials in July,” a local trader opined.

“This week, we do not have LLDPE grades offers due to this shutdown as CAP is only able to meet contract about 60% for LLDPE Film C4 after the plant outage,” a distributor shared to SSESSMENTS.COM.

“We heard CAP could only meet contract quantity for Q3 for about 60% from the normal allocation following the plant outage,” a local PE producer informed.

“We heard that CAP cancelled thousands of tons of LLDPE Film C4 orders from China market for July shipment following the shutdown at its LLDPE plant,” one of the Indonesian traders shared with SSESSMENTS.COM.

“CAP distributor already closed offers for LLDPE Film C4 due to unplanned shutdown of the plant since they are only able to make deliveries for July deals only,” a converter revealed.

“We heard that there is tight supply especially for LLDPE grades in the domestic market as market players anticipate cuts on the contract allocation from CAP after the plant outage,” another local converter told SSESSMENTS.COM.

“One of CAP distributors reveals that there is an issue at the producer’s PE plant so that the contract allocation for July will be cut. We expect that the tight supply of LLDPE grades would persist until August,” a packaging manufacturer pointed out.

“Regarding the 40% reduction of contract allocation for Q3 2020 initiated by CAP, we have reconfirmed that this applies only for LLDPE anti-slip and only for July. The producer informed it is due to technical issues at their LLDPE plant,” another packaging manufacturer informed SSESSMENTS.COM.

“We have followed developments of CAP’s lack of LLDPE Film C4 allocation since the shutdown and anticipated it by securing some quantities from a local trader for buffer stocks,” one of the local converters said.

“CAP still has a problem at their LLDPE plant, that's why LLDPE allocation from them is limited and only can meet contract customers' needs. At the moment, the producer does not have spot offers and some sellers are taking advantage of this situation,” a converter told SSESSMENTS.COM.

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