Indonesian players: Calmer PP market despite firming import offers

Indonesia market opens this week on firmer notes in both local and import ground and there are a good number of deals for homo-PP reported. However, the momentum is loosing steam toward the end of the week and the number of transaction is dropping visibly.

It appears that buyers in the country have made sufficient purchases and currently withdraw to the sideline to monitor further development. A converter purchased Saudi’s homo-PP yarn at $1095/ton CIF Indonesia, LC AS term in the previous day said, “We have comfortable inventory until early April. Market is galloping higher on daily basis yet it is still uncertain if Chinese buyers would be able to accept such rapid hike. Therefore, we prefer to take a breath and wait for further indication from China market.”

Another buyer purchased Saudi cargoes at $1100/ton CIF, added, “We are not able to accept prices at higher levels at the moment. Vietnamese buyers are very aggressive this week, which drive market up too quickly. We plan to procure some local cargoes to cover our production for April.” Domestic homo-PP offers currently stand at IDR16,400,000-16,800,000/ton ($1232-1260/ton) without VAT, FD Indonesia, cash term.    

Meanwhile, Southeast Asian suppliers continue to implement hike on their cargoes to the country with prices below the $1200/ton CIF term are becoming scarce. A woven bags manufacturer said, “Some of Thailand cargoes are offered above the local term, and unless it is necessary, we would only replenish from domestic ground. Our end product business is mediocre and transferring higher raw material costs to end product prices is tremendously difficult.”

Despite calmer buying interest for imported cargoes, players in the country still hold to the expectation that homo-PP prices might continue to rise in the coming months, though the pace might be slower given the current propylene market condition.