Local LLDPE film supply in Indonesia, Malaysia to remain tight in April

As a fresh month starts, players in Indonesia and Malaysia are reporting lack of LLDPE film availability from respective domestic major suppliers due to a series of production interruption. This is expected to keep LLDPE film supply in these markets tight throughout April.

In fact, in Indonesia, Chandra Asri unexpectedly take its 200,000 tons/year HDPE/LLDPE swing plant off-stream during late March 2017 due to electricity supply issues. A source close to the company informed, “The impact of electricity supply on the plant could be severer than other problems and the plant might take slightly longer to come back. We therefore will not be able to fulfill any contract or spot orders in the next few weeks.” However, buyers in the country reported about quality related issues associated with the maker’s March delivery cargoes, which market believed to be the main cause of the shutdown.

Besides, PT. Lotte Chemical Titan Nusantara has also witness persistent technical glitches at its 200,000 tons/year LLDPE line, which resulted in limited allocation to both Indonesia and Malaysia market. A trader commented, “Though demand in Indonesia is not strong at the moment, however we think with supply tighten while the Ramadan preparation season is just around the corner, market might face serious limited supply condition in the near term.”

Another buyer in Malaysia added, “Demand for our end product is picking up and we might need source some LLDPE film cargoes from import market since both of local suppliers are unable to deliver cargoes this month. This might become very challenging for buyers that are not able to import material directly.”

Several international traders therefore decided to hold very firm stance on their available cargoes, seeing brighter prospect in term of buying interest in these markets.