Local trader cut homo-PP offers in Indonesia

It is reported that a major local trader in Indonesia has down adjusted homo-PP offers to domestic buyers today by $30/ton from last week for October delivery cargoes. Latest offers from the trader stand at $1260-1270/ton without VAT, FD Indonesia, cash term.

Buyers are surprised with the development and started reconsidering the purchases of import material. A converter commented, “This is the side effect of persistent weak demand in Indonesia. There are also volume discount available and therefore we think import offers for non-dutiable cargoes above the $1250/ton CIF term might face serious resistance.”

Other buyers on the other hand decided to take the cargoes given its current competitiveness. A source added, “These cargoes are for October delivery and we planned to build up some inventories for November. We obtain another $10-20/ton discount on volume and cash payment.”

Other traders are suspending offerings to monitor further development before taking the next steps. However, players are expecting similar move despite the limited supply condition from major local producers. “This a big drop and it comes so sudden while most international suppliers are holding firm on the cargoes. We have yet to take any action on our cargoes, but likely to follow the development,” a trader added.

As reported earlier, demand for homo-PP yarn in Indonesia has been really sluggish as converters in this sector are unable to obtain sufficient end product orders to cover the costs. The trader’s price decision also derived from the fact that on-hand inventory for this grade is higher than usual. Players are watching closely the effect of such development on the import ground.