Indonesian players: Local HDPE film market is nowhere nearing the peak

In one of the latest developments in domestic PE market in Indonesia, suppliers here are showing no wavering in hiking HDPE film prices with strong support from the supply tightness that has been affecting the whole region.

Compared to late October, the average HDPE film prices based on FD Indonesia, cash equivalent has surged approximate $65/ton, to reach closely to $1360/ton as of this week, CommoPlast Price Index showed. Players are not expecting this trend to end so soon given the limited availability in domestic ground.

There are only couple of major traders having spot HDPE film cargoes at the moment, players said, creating a very conductive environment for prices for increase further. “Both domestic producers are only able to fulfil part of contract volume, while spot supply is draining up. Market is nowhere nearing the peak, from our opinion,” a trader commented.

Many converters in the country are suffering from large drop in end product orders and thin profit margin. “Our end product customers are unable to accept the recent hike in raw material prices, hence reduced the purchased quantity by 30%. We have been looking for cargoes from both local and overseas suppliers, yet only managed to obtain a small quantity. We are not seeing any significant factors that could drag prices lower in the immediate term,” a HDPE bag maker added.

In fact, buyers are reporting of delay in shipment for Philippines HDPE cargoes while Thai makers only have minimal quantity available sold at $1310/ton CIF Indonesia, LC AS term this week. Players are expressing expectation for a slower market condition only by late December due to the holidays season, “For now, room for further price hike seems plenty,” sources said.