Indonesian Converters: Current Price Trend For PP Resins Unsuitable For End-Products Demand
- Supply condition propped up local PP prices
- Current import PP offers considered unworkable in the Indonesia market
- Price trend expected to sustain while demand would be weaker in the near future
Indonesian converters lamented that the current price trend for PP resins is not suitable for end-products demand. On the week starting June 15, SSESSMENTS.COM’s noted that the leading Indonesian polyolefins producer decided to maintain a stable offer level for PP Homopolymer and Copolymer grades. At the same time, local offers for PP Homopolymers via a trader were hiked by IDR100,000/ton ($7/ton). Likewise, another trader also adjusted up the offers for PP Homo Injection and PP Homo Raffia by IDR200,000/ton ($14/ton). To date, the trader managed to conclude some deals for both materials at IDR14,800,000/ton ($1,045/ton) on cash, FD Indonesia basis and excluding 10% VAT, or by IDR200,000/ton ($14/ton) lower than the initial offer level. From the largest local trading house, some converters received offers for localized Thai PP Homo Film at IDR400,000-500,000/ton ($28-35/ton) higher while Southeast Asian PP Homo Raffia cargoes offered at a stable level. All offers are on a weekly comparison. In the past few weeks, most local sellers gained momentum from the low inventory in the domestic market to keep the prices firm, market players further explained.
In the import market, offers for Saudi PP Homo Raffia cargoes went up by $20/ton from last week’s level, stood at $950/ton on LC at sight, CIF Indonesia Main Port basis. Some players commented that such a level is too high and unworkable in the Indonesia market, citing that there were some deals for local PP Homo Raffia closed at IDR13,800,000-13,900,000/ton-level, equal to $900/ton-level. As such, some buyers decided to skip purchasing import materials at the moment. However, for those buyers who are willing to take the Saudi cargoes, a global trading house notified that the producer provides room for negotiation. From the Southeast Asia market, a regional trader mentioned that Vietnamese cargoes to the Indonesia market remain absent this week as the supplier is having limited supply and prefers to divert their cargoes to China. Further added by a trader to SSESSMENTS.COM, import offers for Singaporean PP Block Copolymer are available at $20/ton higher from last week’s level.
Despite the firm prices, domestic demand for PP resins remains healthy this week as propped up by supply shortage. Most buyers had no choice rather than to secure some volume in anticipation of further price increment or at worst, buyers will be unable to get any cargoes in the days to come. Due to this, some converters are forced to purchase raw materials even though the prices do not fit with the demand for their finished products that have yet to show significant improvement so far. On the supply front, tightness from local producers and traders persists. As SSESSMENTS.COM noted, the leading Indonesian polyolefins producer has limited stocks since a few weeks ago, while the largest local trading house in the country intends to maintain the inventory at a low level since last April.
Looking ahead, the majority of market players contacted by SSESSMENTS.COM believe that finite supply is expected to prolong to the upcoming weeks and it will support local PP prices to remain stable or even slightly firmer. Meanwhile, demand is predicted to be stagnant or would be weaker since buyers already replenished their cargoes previously.
Local/localized PP offers on cash, FD Indonesia basis and excluding 10% VAT in all terms
| Origin | Product | Transaction Type | Offers (IDR/ton) | Equivalent in USD/ton | Payment Term |
|---|
| Indonesia | PP Block Copolymer | Price List | 15,290,000 | 1,079 | Cash In Advance |
| Indonesia | PP Homo Film | Offer Given | 15,600,000 | 1,101 | Cash In Advance |
| Indonesia | PP Homo Film | Offer Given | 14,600,000-15,700,000 | 1,031-1,108 | 30 Days Credit Term |
| Indonesia | PP Homo Film | Offer Received | 15,100,000-15,450,000 | 1,066-1,091 | 30 Days Credit Term |
| Indonesia | PP Homo Film | Offer Received | 15,900,000 | 1,123 | 15 Days Credit Term |
| Indonesia | PP Homo Film | Price List | 15,450,000 | 1,091 | Cash In Advance |
| Malaysia | PP Homo Film | Offer Received | 15,300,000-15,800,000 | 1,080-1,116 | 30 Days Credit Term |
| Thailand | PP Homo Film | Offer Received | 15,500,000-15,700,000 | 1,094-1,108 | 15 Days Credit Term |
| Thailand | PP Homo Film | Purchased | 15,454,000 | 1,091 | 15 Days Credit Term |
| Indonesia | PP Homo Injection | Offer Given | 14,700,000-15,000,000 | 1,038-1,059 | Cash In Advance |
| Indonesia | PP Homo Injection | Offer Given | 14,600,000-15,000,000 | 1,031-1,059 | 30 Days Credit Term |
| Indonesia | PP Homo Injection | Price List | 14,620,000 | 1,032 | Cash In Advance |
| Indonesia | PP Homo Injection | Purchased | 14,800,000 | 1,045 | 30 Days Credit Term |
| Indonesia | PP Homo Injection | Sold | 14,800,000 | 1,045 | 30 Days Credit Term |
| Indonesia | PP Homo Raffia | Offer Given | 14,700,000-15,000,000 | 1,038-1,059 | Cash In Advance |
| Indonesia | PP Homo Raffia | Offer Given | 14,600,000-15,000,000 | 1,031-1,059 | 30 Days Credit Term |
| Indonesia | PP Homo Raffia | Price List | 14,620,000 | 1,032 | Cash In Advance |
| Indonesia | PP Homo Raffia | Purchased | 13,800,000-13,900,000 | 974-981 | Cash In Advance |
| Indonesia | PP Homo Raffia | Sold | 14,800,000 | 1,045 | 30 Days Credit Term |
| Southeast Asia | PP Homo Raffia | Offer Received | 14,800,000 | 1,045 | Cash In Advance |
| Southeast Asia | PP Homo Raffia | Offer Received | 14,600,000-14,650,000 | 1,031-1,034 | 30 Days Credit Term |
| Indonesia | PP Random Copolymer Injection | Price List | 17,050,000-17,520,000 | 1,204-1,237 | Cash In Advance |
Import PP offers on LC at sight, CIF Indonesia Main Port basis
| Origin | Product | Transaction Type | Offers (USD/ton) |
|---|
| Southeast Asia | PP Block Copolymer | Offer Given | 990 |
| Indian Subcontinent | PP Homo Raffia | Offer Given | 920-930 |
| Indian Subcontinent | PP Homo Raffia | Offer Received | 900 |
| Middle East | PP Homo Raffia | Offer Given | 920-930 |
| Middle East | PP Homo Raffia | Offer Received | 930-950 |
Tags: Asia Pacific,English,Indonesia,PP,SEA,Weekly
Published on June 17, 2020 12:54 PM (GMT+8)
Last Updated on June 17, 2020 12:54 PM (GMT+8)
