Indonesia initiates safeguard measures investigation on LLDPE imports
Interested parties have a 15-day window from the announcement date to register for participation in the investigation. However, the KPPI has not yet disclosed the specific duration of the investigation.
The Indonesian Trade Safeguard Committee (KPPI) has launched an investigation into the surging imports of LLDPE, following a formal petition submitted by the Indonesia Olefin, Aromatic, and Plastic Industry Association (INAPLAS) on behalf of local producers PT Chandra Asri Pacific and PT Lotte Chemical Titan-Nusantara. The announcement, made on 09 September 2024, seeks to impose safeguard measures on LLDPE imports classified under HS code 3901.10.92.
The petitioners allege that a significant increase in LLDPE imports has inflicted, or threatens to inflict, substantial harm on the domestic industry. According to the KPPI's preliminary assessment, there is initial evidence to support these claims, indicating that the surge in imports may indeed be causing or threatening serious injury to local producers. Consequently, the KPPI has decided to proceed with a full safeguard investigation under Government Regulation No. 34 of 2011, which governs Anti-Dumping Measures, Countervailing Measures, and Safeguard Measures.
Interested parties have a 15-day window from the announcement date to register for participation in the investigation. However, the KPPI has not yet disclosed the specific duration of the investigation.
Recent data from CommoPlast reveals that Indonesia's LLDPE consumption reached approximately 704,000 tons in 2023, with domestic production accounting for 81.6% of the demand. Notably, local producers exported over 147,000 tons, representing nearly 26% of their total outputs. Despite this, Indonesia imported nearly 277,000 tons of LLDPE in 2023, primarily from Malaysia, Thailand, Saudi Arabia, the USA, and Qatar.
Currently, Indonesia levies a 10% import duty on LLDPE sourced from non-ASEAN countries, a 5% duty on imports from South Korea, and a 6% duty on imports from India. The outcome of this investigation could potentially reshape these tariff structures, significantly impacting the LLDPE market in Indonesia and its major trading partners.
Earlier in 2024, key local producers in Indonesia also sought to impose an import quota on PP and PE, a move that was met with strong opposition from local market participants who argued that domestic supply was insufficient to meet demand. The government officially revoked the import quota mandate on March 8, 2024. This recent safeguard investigation into LLDPE imports suggests a continued effort by domestic producers to seek protectionist measures, despite the challenges and resistance faced earlier in the year.
Written by: Henny Sunarto
Edited by: Rochelle Nguyen