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On the final trading day of the week, the Malaysian ringgit fell to the lowest levels since late January 2016 while Indonesian rupiah sank to five years low, prompting the country’s central bank to step in to stabilize the market. The instant effect on the polyolefin market is that major domestic producer in Malaysia immediately withdrew its offers to local buyers while Indonesian buyers received upward price adjustment for both PP and PE by $45-50/ton.

A Malaysian converter informed, “Our local suppliers have just adjusted PP and PE offers yesterday, and it is so certain that further hike would be announced in the near term. At the moment, we only can wait and see. Out stock is sufficient until end of the month, therefore we might need to replenish some quantity.”

Meanwhile, in Indonesia, a major local producer announced fresh price list to buyers at about $45-50/ton hikes on both PP and PE cargoes mainly due to the currency exchange rate. A trader said, “We withhold our offers to monitor further movement. Demand is very weak at the moment, especially for PE, therefore we are not very confident about the market acceptance level.”

While weakening local currency implied an opportunity for converters, who are exporting their end product, it also creates potential payment collection issues for local suppliers. Many have adopted more cautious stance when giving offers.