Morning Briefing - 11 August 2026

Firm costs, fading confidence: Indonesian PP market slides further

The Indonesian homo-PP market opened the week on a soft note, with a major domestic producer implementing its fourth price cut in just two weeks and slashing spot values by more than 14% as weak market confidence continued to outweigh firm upstream cost support.

Despite headlines surrounding the potential reopening of the Strait of Hormuz, global crude oil benchmarks remained relatively steady, while propylene prices lingered at multi-week highs. Meanwhile, Saudi Aramco’s latest decision to raise its August LPG OSP by $40/ton month on month further pointed to mounting production cost pressures for Asian petrochemical producers in the near term.

The stark disconnect between downstream PP prices and upstream costs has raised questions over how much further producers can cut prices while cost pressures remain elevated. With buyer confidence showing little sign of recovery, the Indonesian market appears increasingly caught between stubborn upstream costs and increasingly fragile downstream demand.

Malaysian LLDPE buyers step up restocking as supply risks grow

Malaysian LLDPE film buyers are planning to step up purchases this week amid growing concerns over the availability of ready-stock cargoes in the local market, as a major domestic producer is scheduled to shut down for an extended maintenance period. The development comes against the backdrop of persistent Middle East supply disruptions and tightening regional availability, which has encouraged buyers to bring forward restocking plans.

That said, a significant surge in buying is unlikely. Converters are expected to maintain a prudent purchasing strategy in the near term, balancing the need to secure sufficient material against subdued downstream business and the need to protect margins.