Import homo-PP to Indonesia continue to move higher

As the firming trend spread across the Asia region, Indonesian buyers this week reported to have received fresh homo-PP offers from various overseas suppliers with increases. Initial respond mostly shows strong resistance to the new prices, pointing to slow end product business and competitive local cargoes.

New price opening from two major Saudi Arabia producer indicated $40-50/ton hike compared to two weeks ago, reaching $1150-1160/ton CIF Indonesia, LC AS term. A woven bags maker commented, “This offers are too high considering the import duties. Government project tender is coming end of this month; just yet the end product prices are too low. Transferring high raw material prices to end product is more challenging than ever. We have comfortable material till May, therefore we are not in rush to make any replenishment at the moment.”

Even non-dutiable cargoes from Philippines and Vietnam are now above the $1200/ton threshold, based on CIF Indonesia, LC AS term, narrowing the price gap with domestic material. “Import offers firm up too quickly while domestic market is not catching up despite the supply tightness condition. Many buyers therefore, prefer to source local cargoes instead,” a trader commented.

International suppliers are claiming lack of allocation due to several major PP plants are undergoing maintenance shutdown, which support higher prices, in addition to strong propylene costs. Yet, buying interest among Indonesian buyers started showing some inexplicit signs of stagnating. If demand condition in China remain weak in the coming week, impact on Southeast Asian market might be even clearer.

Import homo-PP to Indonesia currently stand at $1130-1280/ton, CIF Indonesia, LC AS term.