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Domestic traders in Indonesia have been claiming healthy sales results for LLDPE film since last week and this condition supported a strong hike in spot offers this week. CommoPlast data showed the average local LLDPE film prices, based on FD Indonesia, cash equivalent surged more than $50/ton in a single week, and yet, transactions remain ‘excellent’.

The last time the market witnessed such sharp increases was during late December 2017, however, unlike the previous cycle, Indonesian buyers continue to procure cargoes this time, forcing several major local suppliers to suspend all offerings.

“It is some kind of panic buying,” a trader said, adding that he has achieved deals for locally produced LLDPE film in Medan and Java city at IDR19,500,000/ton ($1410/ton) without VAT, FD Indonesia, cash term.

A major local producer implemented IDR460,000/ton ($33/ton) increased on LLDPE film cargoes from yesterday to IDR19,200,000/ton ($1389/ton) without VAT, FD Indonesia, cash term. “The maker withdraw the offers very shortly after the hike and we assume more increases shall emerge in the coming week,” another buyer added.

The stronger local ground has quickly spread the positive impact on the import ground, from which several international traders reported achieving ‘excellent’ sales this week. “We sold Indian LLDPE film at $1160/ton CIF Indonesia, LC AS term without much hassle. This is something that Indonesian market has not seen in a long time. The near-term outlook is rather bullish,” a source said.

Contributing to such development is the fact that many converters have been holding low inventories while stretching purchases over the past month with hope to obtain more discounts. This has totally clouded a silent movement that major domestic makers have reduced operation rate at LLDPE units in focus on upstream ethylene market for better margin. Buyers might continue to source additional cargoes in the coming days, however, the market posted a possibility that sentiment could slow down towards the fasting month.