Local sentiment nosedived in Indonesia as trader slashed PP prices

Demand for homo-PP in Indonesia has been sloppy over the past months, especially for yarn grade, as woven bag sector suffer from serious drop in end product orders. Domestic offers remains on the softening track throughout October in spite of the supply tightness condition observed across the region. This week, buyer confidence takes another step down amid heavy concern that the weakening trend might persist.

The sharpest price reduction observed in the distribution market (represented by the Lower End series in the above graph) though traders have attempted to maintain firm stance in the past week. At the meantime, local producer’s price list (represented by the Upper End series in the above graph) hold relatively stable, creating a large gap of about $100/ton between the two channels.

A converter obtained locally held Vietnamese and Philippines homo-PP yarn at $1220-1230/ton FD Indonesia, without VAT, cash term said, “The trader agreed to $20-30/ton discount from last week given minimum purchased quantity is 200 tons. This level is more competitive than both locally produced and import materials. We decided to make some replenishment.”

The available of competitive cargoes in local distribution market is putting tremendous pressure on the import ground. With dutiable homo-PP cargoes ranging $1150-1180/ton, buyers are not showing strong interest, especially for offers at the upper end of the range. “Customers are very inactive though we are open to negotiation with serious buyers. Supply is tight while demand in the Indian Subcontinent remains healthy, yet little support is observed in Indonesia. We are waiting for further development before making decision,” a regional trader informed.