Import LLDPE film to Indonesia journeys north, fierce competition with local cargoes

The import LLDPE film to Indonesia briefly breached below the $1100/ton threshold during the first two weeks of July due to tremendous downward pressure from domestic market, which has been falling since late March on persistent weak demand during post Ramadan term.

However, import offers witness minor up-trend this week as overseas sellers take firmer stands seeing better demand from Chinese buyers. On an average, import LLDPE film to Indonesia gain about $15/ton week on week and prices below the $1100/ton threshold are becoming scarce. “Our customers have yet to accept the new offers, however we think this is where the market should be now and hence we prefer to hold firm on the available parcels,” an international trader offered Saudi LLPDE film at $1110/ton CIF Indonesia said.

With the firmer trend taking place in the import ground, local market has yet to respond, from which the price gap between import and local market narrow down to only $20/ton - the lowest level since beginning of the year. This explains to why demand for overseas cargoes in Indonesia remain low. Indonesian buyers believed that domestic market has also reached the bottom and likely to gain momentum in the near term, “Yet, we are not seeing any drastic upward movement as most converters are not eager to make large replenishment,” a market source said.

Discussing with several manufacturers in the flexible packaging sector, a source said, “Demand for our end product drop about 50% month on month and likely to remain low throughout July. We have comfortable supply on hand sourcing mainly from local sellers, and might not replenish anytime so soon.”

Such condition might give international sellers limited room to increase offers further unless local market move up considerably, players said.