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Over the past week, major suppliers in Indonesia have been holding a rather firm stance on both PP and PE cargoes citing the tightening supply condition, especially from regional suppliers.

Data from CommoPlast highlighted a rather large hike on spot LLDPE film cargoes compared to the beginning of December, approximately $45/ton on an average while homo-PP yarn surged about $35/ton and HDPE film gained $25/ton.

According to local traders here, demand condition has yet to show any significant improvement and in fact, many buyers are away for the holiday, causing a rather sluggish trading activity. However, supply prospect is tightening, especially with major shutdown in the local market and around the Southeast Asia region.

“Our regular Malaysian supplier has cut January allocation significantly due to the upcoming shutdown. We are also receiving very limited PE quantity from Thai producers. We have to lift prices to reflect the supply condition,” a local trader reported.

As CommoPlast reported earlier, a series of PE plants going offline in the first quarter of 2020 is removing a substantial quantity from the regional import market, which is putting the market on the stable to firmer track.

Some local traders in Indonesia have implemented an extreme measure to suspend all offerings with the expectation that spot prices might continue to climb in the coming days.

“However, we remain very cautious in the medium term because, in principle, supply is growing quicker than demand. In the meantime, the immediate term market has sufficient support to remain firm, which is an advantage to sellers following months of decline,” another trader added.     

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Indonesia