Indonesian traders lifted local HDPE film prices on tightening supply

Earlier this week, domestic producers in Indonesia slashed local PE prices on the back of soft sentiment in the import ground. However, buying interest improved significantly as buyers made final replenishment before Ramadan road ban takes place and also due to the recent fire incident at Chandra Asri’s cracker. In the distribution market, therefore, traders implemented approximate IDR200,000/ton ($15/ton) hike on HDPE film cargoes claiming low availability.

A buyer purchased local cargoes at IDR15,000,000/ton ($1127/ton) without VAT, FD Indonesia, cash term said, “Domestic supply for HDPE film is tightening due to some production issues. We have replenished sufficient material till early August, hence might wait and see on the side line for the remaining of June.”

Another trader sold HDPE film at IDR15,390,000/ton ($1155/ton) without VAT, FD Indonesia, 30 days term added, “We managed to sell very well this week, however we are still concern over the state of demand in the post Ramadan period. Market might not pick up immediately after the holidays since many buyers have replenish longer than usual inventories.”

Trading activities in Indonesia is expected to slow down in the coming week as converters reduce operation rate to allow workers to return hometown. Yet, with reduced inventories pressure, it is likely that domestic sellers might attempt to hold prices from any significant drop as an effect from import ground.