Tightening local LLDPE film supply pushes price up in Indonesia

In Indonesia, it is reported that most traders are holding back their LLDPE film cargoes after a major local producer is unable to restart its PE plant after a technical issue occurred last week. Players in the country are concerning about a possible local LLDPE film shortage in the near term if the plant issue persist.

A local producer informed, “We are not achieving any prime grade cargoes till now and we are unsure on when the production could be more stable. Until then we are only having off-grade cargoes.”

In the distribution market, suppliers are lifting offers by approximate IDR200,000/ton ($15/ton) compared to last week with very limited quantity available. A trader informed, “We are having some cargoes, but very small allocation. Many of our customers are away for holidays; therefore the impact on the market sentiment is not very strong. However, if this condition sustain into 2017, we think domestic prices might firm up further.”

Converters are not very confident in scouting for cargoes at the moment given slack end product business. A buyer commented, “We are in dilemma whether to stock up material now as we are unsure if end product business could improve in the near term. We might monitor further development before making decision.”