While import PP to China and Vietnam rebound, Indonesia market remains in struggle

struggle

The import homo-PP market in Asia has been firming up over the past week after suffering from the Lunar New Year blue that caused steep reduction since late February 2018. On an average, import homo-PP offers to China and Vietnam gained $10-20/ton week on week with deals realized at the latest price levels.

The situation is not as bullish in Indonesia and offers for non-dutiable cargoes continue to inch lower as ASEAN suppliers are caught in an intense competition with domestic suppliers to maintain the competitiveness and market share. Import homo-PP cargoes originated from Singapore, Vietnam and Philippines fell $20-30/ton week on week to the range $1270-1290/ton CIF Indonesia, LC AS term.

Import materials from non-dutiable origins are now traded on the same par with the average domestic prices, which also caused the price gap between dutiable and non-dutiable cargoes to about $50/ton – the lowest since late December 2017.

“Indonesia market might take a little longer to catch up with the regional trend. Our customers are not showing the eager to buy import as local traders are offering at very competitive levels,” an international trader said.

Major local suppliers in Indonesia continue to forward-selling cargoes for May delivery with strong willingness to negotiate with serious buyers. “Our supplier open offers for yarn grade at IDR17,500,000/ton ($1270/ton) without VAT, FD Indonesia, cash term and currently inviting for bids. We are asking for larger than usual discount and currently waiting for the supplier’s feedback. If our bids become successful, import market would suffer from more pressure,” a converter reported.

Indonesia in the near-term outlook might not be an ideal export destination for many overseas sellers, however, the sentiment might improve toward June, when the renewal of the Import Duty Borne by the Government (BMDTP) scheme comes to completion.