Indonesian players: Local HDPE tightness might persist, fear of panic buying showed

On the first trading day of the week, a major domestic producer in Indonesia rollovers PE offers for the fourth week in a row, citing limited availability, especially for HDPE grade. However, a bolder movement is observed in distribution ground, where HDPE film and blow moulding witness a hike of IDR270,000-400,000/ton ($20-30/ton) week on week.

A number of HDPE bags makers contacted by CommoPlast raised the concern that supply for HDPE might be tighter for longer and that they might need to accept the hike to make replenishment given insufficient inventory on hand. A converter received locally held Malaysian HDPE film at IDR17,600,000/ton ($1300/ton) without VAT, FD Indonesia, cash term said, “We are planning to restock for December production. Our regular supplier is not having cargoes, which might continue to keep prices on the stable to firmer trend in the near term.” Other buyers share similar intention to make purchases within this week.

Both local producers in Indonesia are currently operating at lower than usual rate, with one of the maker added, “We are not taking any spot order at the moment. Our plant remains operating at low rate due to persistent high ethylene costs. We fear that this condition might persist throughout this year.”

Another trader lifted offers for HDPE film and blow molding by $20/ton said, “Even supply for Thai origin material is very tight, too. Buyers might have no choice but to accept the increase, and there might be a panic buying in local ground if overseas market continue to firm up.”