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Indonesian players returned to the market after the long Ramadan holidays to see little changes in the market fundamentals. Selling pressure on homo-PP continues to take place while supply tightness for LLDPE film is getting severer.

In fact, major suppliers for homo-PP in the country continue to offer forward selling cargoes for July delivery at IDR18,900,000/ton ($1333/ton) without VAT, FD Indonesia, cash equivalent, amid sluggish buying interest. “Demand has not seen any major improvement and despite the attractive offers, buyers only procure small quantity to safeguard minimum inventories level,” a trader commented.

The competitive local market has created a huge barrier for overseas sellers to attract buyers in this market. The pressure on import market is real and many suppliers decided to move cargoes elsewhere for smoother sales. 

In contrast, supply tightness for LLDPE film is severer in the post-holiday period as both major domestic producers are unable to restore regular production rate after the shutdown earlier this month. A number of converters have returned to make additional purchases at IDR20,700,000-21,000,000/ton ($1458-1479/ton) without VAT, FD Indonesia, cash equivalent. 

The upward adjustment in LLDPE film offers partially due to the depreciation of the Indonesian Rupiah, sources said, however, supply played a larger part. “Despite the high prices, the suppliers only able to allocate 5 tons of material to each buyer. We are looking at import market as an alternative,” a buyer commented. 

Several other buyers are facing the same issue and planning to source Middle Eastern LLDPE film cargoes for August and September arrival. “End product demand in July is not strong, and therefore, we only plan inventories for late quarter 3 onward. Import is a better choice now,” another buyer added.