Indonesian PP market: Trader offers above producer's price list

As reported earlier, a major local Indonesian producer opened the new week by introducing $20/t hike on homo-PP cargoes compared to last week, bringing the latest offer level to $1248-1268/t excluding VAT, FD Indonesia. However, traders are reporting to have been selling at least $25/t higher than the producer’s price list.

A local trader commented, “We have oversold homo-PP allocation for March and hence we decided to lift offers higher than producer’s benchmark. Demand in local market remains healthy which might continue to support higher prices in the near term.”

Meanwhile, converters are expecting a longer than expected tight supply condition which encouraged them to purchased additional quantity. A buyer reported, “Local producer informed that they would increase contract alpha by $70/t for the second quarter 2016 and any additional quantity to regular allocation, we might need to pay another $50/t higher. We are not expecting any supply relief at least until June; therefore we plan to source extra quantity now.”

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