The leading Indonesian polyolefins producer shared with SSESSMENTS.COM on the major ground behind price adjustments in the local market this week. As informed, the producer quoted higher offers to the domestic market following a recent jump in formula prices, despite a wave of price cuts in the local market. “We are fully aware that most local traders set off a round of price reduction to the market, even lower than our price list. Some local traders even managed to sell our HDPE Film and LLDPE Film C4 materials below IDR14,000,000/ton-level. However, our company sets different pricing strategies from local traders, simply in response to higher formula prices,” the producer explained.
As stated to SSESSMENTS.COM, the producer initiated a price increase of IDR440,000/ton ($30/ton) for HDPE grades and IDR290,000/ton ($20/ton) for LLDPE grades in comparison to the previous price list announced on July 6. The producer said that the company has no allocation for LLDPE Film C4 cargoes to the spot market this week, citing that the company is focusing on meeting its contract customers needs. As for HDPE Film, the producer is still offering the materials to the spot market. As for PP, local offers for across different grades were adjusted up between IDR140,000-150,000/ton ($9-10/ton) as compared to the same period. However, the producer is running low on PP allocations to the spot market.
On the demand front, the producer said that Indonesian polyolefins market has largely been weighed by bearish sentiment over the week amid sluggish end-product demand. The government’s move to phase out single-use plastics in some cities has stirred concern among Indonesian market players about the growth of polymers demand, particularly for HDPE Film grades. The producer said that the company saw a gradual decrease in demand for these grades as many converters in Jakarta reduce their purchasing volumes after the government reinforced the regulations. In contrast, SSESSMENTS.COM was informed that overall downstream PP consumption in Indonesia is still considered healthy. Sales for certain finished products remain strong, except for PP Block Copolymer applications. The producer pointed out that the recovery in home appliances and automotive sectors has yet to take place as overall consumer’s confidence has yet to improve.
For the outlook, the producer doubted that local polyolefins price will continue its bullish run as current levels are deemed too high, asserting that buyers’ stiff resistance toward higher offers might hinder price adjustments. The producer added that one of the local traders lowered its PE offers significantly between IDR500,000-700,000/ton ($34-48/ton) from last week due to strong resistance from buyers.
Tags: Asia Pacific,English,Indonesia,News,PE,PP,SEA
Published on July 15, 2020 4:17 PM (GMT+8)Last Updated on July 15, 2020 4:17 PM (GMT+8)
