Morning Briefing - 05 Mar. 2025

CommoPlast

Morning Briefing

05 March 2025

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Trimming Export Offers

Defying the stable pricing trend set by other exporters earlier in the week, a major Chinese PP producer reversed course, cutting homo-PP export offers by $8/ton. This move erased all gains recorded in the previous week, underscoring the volatility in China’s export market. A depreciating Yuan provided exporters with greater pricing flexibility, particularly against the backdrop of escalating global trade tensions that continue to unsettle market sentiment.

While the price reduction generated an uptick in overseas inquiries, concrete transactions have yet to materialise. Market players are now assessing the potential impact of the Ramadan season on short-term PP demand. A key uncertainty remains whether buyers in Muslim markets will proceed with pre-holiday stockpiling at current price levels.

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Indonesia’s domestic HDPE and LLDPE Markets Soar

Despite intermittent fluctuations, Indonesia’s HDPE and LLDPE film markets have maintained an upward trajectory since September 2024, largely driven by the depreciation of the Rupiah and tightening regional supply. Over the past week, the local markets have surged more sharply, albeit at an uneven pace, which led to a narrowing price gap between the two grades.

A major local producer has implemented three consecutive weekly price hikes on HDPE film, amounting to a total increase of IDR 1,160,000/ton, pushing the grade to an eight-month high. In contrast, LLDPE film saw a comparatively modest increase of just IDR 330,000/ton over the same period.

However, resistance to the price hikes is mounting. Buyers are increasingly exploring cost-effective alternatives, such as recycled materials, to mitigate escalating production costs. The challenge of passing on higher raw material prices to end products remains a significant hurdle, raising concerns about the sustainability of the current price rally.

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