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The domestic homo-PP market in Indonesia has just witnessed the steepest plunge this year, shedding nearly $250/ton on an average in a course of six weeks. However, purchasing interest improves visibly this week and players started putting up questions and speculation if the market is nearing the bottom.

At the moment, homo-PP yarn cargoes are offered in the range IDR17,000,000-17,940,000/ton ($1170-1237/ton) without VAT, FD Indonesia, cash equivalent. 

A number of deals have been achieved at the lower end of the overall price range and despite heavy effort from buyers to push prices below the IDR17,000,000/ton mark, no sellers have agreed to such bids.

It is reported that locally produced cargoes are not widely available due to the persistent production issues; “However, there is a comfortable supply for locally held Vietnamese material,” a trader said. The source added that he attempted to lift prices by IDR500,000/ton ($35/ton) this week and yet, have to step back on deals at IDR17,000,000/ton.

“The market has crushed too hard. We think with the firming upstream costs and shorter supply, the market has the support to stabilize in the near-term,” another trader commented. 

In fact, a number of buyers have replenished cargoes this week, believing that room for further reduction might soon disappear. These buyers, however, have no plan to keep too long inventories. A woven bag maker said, “We are covered until the end of February. We fear the demand condition might diminish in the coming months due to uncertainties associated with the general election.”

The medium-term outlook remains cloudy, though it appears that local traders here might hold offers firm for the time being considering the number of deals concluded. Would import market lose steam and demand in the near-by China market drop, sentiment might change accordingly. 

Country
Indonesia