Demand Conditions Put A Cap On Price Adjustments
- Local and localized PP prices move to different directions
- Reduction in inter-island shipping schedule led to supply disruption in Medan
- Outlook remains bleak
Demand conditions in Indonesia put a cap on price adjustment sparked by the currency exchange rate. Within the week commencing July 20, local and localized PP prices in Indonesia captured moving to different directions. The leading Indonesian polyolefins producer maintained the offers for all PP grades stable over the week. Meanwhile, due to the depreciation of the local currency against the U.S Dollar, a local trader in the country adjusted up the offers for local PP Homo Raffia and PP Homo Injection by IDR200,000/ton ($14/ton), following price correction made by another local supplier. Likewise, local PP Homo Film and localized PP Homo Raffia and PP Homo Injection of Vietnam origin increased between IDR40,000-150,000/ton ($3-10/ton). On the contrary, SSESSMENTS.COM noted that some traders made a downward price correction due to the sluggish demand. The biggest local trading house in the country adjusted down offers for localized Southeast Asian PP Homo Raffia by IDR150,000/ton ($10/ton). While localized PP Homo Film of Thailand origin dropped by IDR500,000/ton ($34/ton). All price changes are on a weekly comparison.
In the import market, Middle Eastern PP Homo Raffia offers remain stable from last week, available between $950-960/ton on LC at sight, CIF Indonesia main port basis. For PP Block Copolymer of South Korea origin, the offers stood at $1,020/ton with the same payment and delivery term. In order to attract buyers, a global trading house is willing to sell Middle Eastern PP Homo Raffia at $5/ton lower on the high-end of the price range and $20/lower for South Korean PP Block Copolymer. For Southeast Asian cargoes, import PP Block Copolymer and PP Homo Raffia of Thailand origin to Indonesia for August shipment hiked by $70/ton and $20/ton respectively. Similarly, Malaysian PP Homo Raffia, PP Homo Injection, PP Homo Film, and PP Random Copolymer Injection increased by $40/ton, while for PP Random Copolymer Injection up by $50/ton. All changes compared to July shipment offers, as noted by SSESSMENTS.COM.
In general, demand for PP resins in Indonesia has yet to show any significant improvement. Demand remains tepid as the market is still in the stage of a recovery process. On the supply front, the reduction in shipping schedule from Jakarta to Medan has led to supply tightness in Medan. Added to that, Thai PP cargoes are also not available in Medan due to limited supply stemming from maintenance shutdown at the producer’s PP line, SSESSMENTS.COM was told.
Looking ahead, Indonesian market players stated that the outlook for PP market in the country remains bleak and would depend on the currency exchange rate. If the local currency shows further depreciation towards the U.S Dollar, there is a room for PP prices to be adjusted upward in the upcoming week, since import offers remain firm. However, demand conditions in Indonesia would not support any price increases. Majority of Indonesian market players opined to SSESSMENTS.COM that PP market in the country will be fully recovered by next year.
Local/localized PP offers, FD Indonesia basis, all excluding 10% VAT
| Origin | Product | Transaction Type | Offers (IDR/ton) | Equivalent in USD/ton | Payment Term |
|---|
| Indonesia | PP Block Copolymer | Price List | 16,240,000 | 1,101 | Cash In Advance |
| Indonesia | PP Homo Film | Offer Given | 15,570,000-16,100,000 | 1,055-1,091 | 30 Days Credit Term |
| Indonesia | PP Homo Film | Offer Given | 15,990,000 | 1,084 | Cash In Advance |
| Indonesia | PP Homo Film | Offer Received | 15,600,000 | 1,057 | 15 Days Credit Term |
| Indonesia | PP Homo Film | Price List | 16,550,000 | 1,122 | Cash In Advance |
| Malaysia | PP Homo Film | Offer Given | 16,400,000-16,600,000 | 1,112-1,125 | 15 Days Credit Term |
| Thailand | PP Homo Film | Offer Received | 16,000,000-16,600,000 | 1,085-1,125 | 15 Days Credit Term |
| Indonesia | PP Homo Injection | Offer Given | 15,300,000-15,800,000 | 1,037-1,071 | Cash In Advance |
| Indonesia | PP Homo Injection | Offer Given | 15,570,000-16,000,000 | 1,055-1,085 | 30 Days Credit Term |
| Indonesia | PP Homo Injection | Price List | 15,570,000 | 1,055 | Cash In Advance |
| Vietnam | PP Homo Injection | Offer Given | 15,330,000 | 1,039 | Cash In Advance |
| Indonesia | PP Homo Raffia | Offer Given | 15,300,000-15,800,000 | 1,037-1,071 | Cash In Advance |
| Indonesia | PP Homo Raffia | Offer Given | 15,570,000-16,000,000 | 1,055-1,085 | 30 Days Credit Term |
| Indonesia | PP Homo Raffia | Offer Received | 15,900,000 | 1,078 | Cash In Advance |
| Indonesia | PP Homo Raffia | Offer Received | 15,200,000 | 1,030 | 30 Days Credit Term |
| Indonesia | PP Homo Raffia | Price List | 15,570,000 | 1,055 | Cash In Advance |
| Southeast Asia | PP Homo Raffia | Offer Received | 14,750,000 | 1,000 | Cash In Advance |
| Southeast Asia | PP Homo Raffia | Offer Received | 15,700,000 | 1,064 | 30 Days Credit Term |
| Southeast Asia | PP Homo Raffia | Buy Idea | 15,500,000 | 1,051 | Cash In Advance |
| Vietnam | PP Homo Raffia | Offer Given | 15,330,000 | 1,039 | Cash In Advance |
| Indonesia | PP Random Copolymer Injection | Price List | 18,030,000-18,500,000 | 1,222-1,254 | Cash In Advance |
Import PP offers on LC at sight, CIF/CFR Indonesia Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Far East Asia | PP Block Copolymer | Offer Given | 1,020-1,050* |
| Far East Asia | PP Block Copolymer | Sell Idea | 1,000 |
| Southeast Asia | PP Block Copolymer | Price List | 1,050 |
| Southeast Asia | PP Block Copolymer | Offer Given | 1,060 |
| Southeast Asia | PP Homo Film | Price List | 1,050 |
| Southeast Asia | PP Homo Film | Offer Given | 1,040*-1,050* |
| Southeast Asia | PP Homo Injection | Offer Given | 1,010*-1,050 |
| Southeast Asia | PP Homo Injection | Price List | 1,020 |
| Southeast Asia | PP Homo Injection | Bid Received | 970* |
| Middle East | PP Homo Raffia | Offer Given | 950-960 |
| Middle East | PP Homo Raffia | Sell Idea | 950-955 |
| Southeast Asia | PP Homo Raffia | Offer Given | 1,010*-1,050 |
| Southeast Asia | PP Homo Raffia | Price List | 1,020 |
| Southeast Asia | PP Homo Raffia | Bid Received | 970* |
| Southeast Asia | PP Random Copolymer Blow | Price List | 1,170 |
| Southeast Asia | PP Random Copolymer Injection | Price List | 1,120 |
Description: *Offers on CFR basis
Tags: Asia Pacific,English,Indonesia,PP,SEA,Weekly
Published on July 22, 2020 1:43 PM (GMT+8)
Last Updated on July 22, 2020 1:43 PM (GMT+8)
