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It is reported that a major local producer in Indonesia has slashed PE prices drastically toward the end of the week as demand persist on the soft side. Compared to official price list given earlier this week, offers for HDPE and LLDPE film from the maker fell approximate $60-70/ton.

A converter received the adjusted prices from the producer at $1090/ton for HDPE film and $1100/ton for LLDPE film, FD Indonesia, cash term said, “We did not expect such significant drop. Most traders are still maintaining offers stable. We decided to take larger than usual quantity since these prices are very competitive.” The source added that end product demand has not picked up after the Ramadan holidays, yet situation might improve in the coming month. Several other buyers shared similar plan.

In contrast, traders are raising complaint that such move by the producer is affecting distribution market negatively as many are still carrying higher costs cargoes on hand. “We have yet to implement any adjustment on our cargoes as it would result in huge losses. The produce is under pressure to sell, therefore we might need to hold our cargoes for a while.”

Another trader added, “These prices are lower than import offers from most Southeast Asian origins. Our customers are asking for similar levels and we could not meet such request to protect margins. Such move could depict a lower-for-longer market trend in domestic ground and this is very alarming to traders.”

Local offers in Indonesia currently stand at $1100-1185/ton for LLDPE film and at $1090-1150/ton for HDPE film, all based on FD Indonesia, cash term.