Korean suppliers become active in Indonesia as FTA comes to effect

At beginning of March 2017, the Indonesian government official implemented preferential scheme on import petrochemical products from South Korea by reducing custom duties based on the ASEA – South Korea Free Trade Agreement.

Based on the agreement, import PP block copolymer from South Korea to Indonesia is now exempted from import duties. Meanwhile, import homo-PP and PE grades are subjected to only 5 percent import duty, instead of 10 per cent.

As a result, it is noticed that Korean suppliers are becoming more active in this market in recently week, offering mostly PP block copolymer grade at the range $1120-1140/ton CIF Indonesia, LC AS term. A converter purchased some quantity at the lower end of the range said, “We think this prices is relatively competitive compared to Southeast Asian origin. With the preferential import duty rate, we think South Korean material might become more popular in Indonesia in the coming months.” Many other buyers are sharing similar opinion.

A South Korean trader added, “This is a very good opportunity for us, especially after the recent incident in China. Indonesia has huge potential and we plan to pay more attention to this market in the future.”