The Indonesian PET market: As it sharply climbed, it is steeply coming down

Earlier this year, import PET bottle to Indonesia rose so quickly to the multi-year high levels on the back of tight supply and healthy demand and once again broke the record during September. Such momentum did not last. 

Import offers have been plunging for eight consecutive weeks now, shredding nearly all the gains accumulated throughout the year to bring the market back to the level last seen at the beginning of January. At the time this report is published, the average import offers for PET bottle to Indonesia has reached approximately $1140/ton, CIF, LC AS term.  

Demand is there, however, not strong enough to create any major support for the market, according to sources. Buyers are holding back on large purchases to wait for further reduction.

“We think Chinese sellers might agree to deals at $1100/ton. We have placed bids and currently waiting for feedback,” a buyer said. 

Weakening upstream costs play a central role in depressing the PET bottle market. In fact, MEG cost based on CFR China term fell to 17 months low on 12 November thanks to the lengthy availability condition. It is reported that most MEG buyers are not willing to buy beyond the contract quantity and that inventories in the local China market are rising. 

“In the meantime, we think the current PET prices are acceptable and might start to procure some quantity first,” a beverage bottle maker added. 

Purchasing activities in Indonesia might pick up more clearly in the near-term would supplier offers additional discount on deals. Many converters are not having high stock on hand following an extended period of limiting large replenishment.