Tight supply keeps local PET prices on the firm trend in Indonesia

The domestic PET market in Indonesia has been following the stable to firmer track over the past several weeks thanks to tightening supply condition and strong upstream costs. This week, offers from major producer continue to rally IDR200,000/ton ($15/ton) from last week, sending local market to the range IDR17,700,000-18,600,000/ton ($1297-1363/ton) without VAT, FD Indonesia, cash equivalent.

The upper end of the overall price range is currently higher than other polyolefins grade such as PP in this market. Players blame the lack of import arrival, which tighten availability and send prices to multi-year high levels. “Traders are not bringing in cargoes from China given the concern on the antidumping duties issues. This has caused a great deal to the supply condition,” a source informed. It is reported that import PET from China have drop by half compared to the same period last year while the government extended the investigation period on dumping issues for import PET from China.

“Strong upstream MEG and PTA costs also play an important role in the recent firming trend. Demand is satisfactory and we think this condition might persist in the near term, especially the Northern Hemisphere markets are preparing for summer season,” a trader added.

A converter managed to obtain a discount to close deals for February delivery at IDR18,500,000/ton ($1356/ton) without VAT, FD Indonesia added, “We only managed to purchase 40 tons. Other suppliers are not having any prompt cargoes at the moment. We might need to replenish additional quantity in the coming day and expected at firmer prices.”