Indonesian traders: PP prices hike face buyer’s resistance

Since November begins, major domestic producer in Indonesia has up adjusted their homo-PP prices five times, accumulating a total increased of more than $100/ton from the earlier month on tight supply ahead of the maintenance shutdown season.

Despite a good number of purchase inquiries received the domestic producer claimed; distribution market is facing stiff buyer’s resistance, from which many have elected to offers discounts to entice buying interest.

A local trader informed, “We were selling very well until mid of last week. Demand for homo-PP yarn is especially weak due to the off peak season, and we are offering $10-20/ton quantity discount, yet the number of deals is rather disappointed. Domestic major implemented another $30/ton hike today and we are not planning to match the latest price increment.”

Buyers on the other hand, mostly claimed to have sufficient inventories on hand at least until the current PP plants shutdown season is over, while unstable political condition is whirling player’s confidence in near term outlook. Not to mention, falling energy and upstream costs are another factors to be blamed.

A converter informed, “We have comfortable stock until end of December this year. There is no need for us to rush another replenishment at the current prices. Our end product customers are not accepting the latest price hike from local producer and several of our purchased orders are still being on hold.”

Players however, reported that supply for PP film and thermoforming is very tight and further price hike on these grades are very possible.

For detailed domestic PP offers in Indonesia, kindly visit our Daily Price section on www.commoplast.com