Local HDPE film market just crashed in Indonesia, buyers concern if the bottom is near

Ever since hitting the peak during early October 2018, the local HDPE film market in Indonesia has been constantly going lower. That is a stretch of fourteen weeks decline, and yet, local suppliers are racing to slash prices day by day this week, which concern buyers if the market is already nearing the bottom.

Data from CommoPlast showed the average HDPE film price based on FD Indonesia, without VAT have plunged more than $500/ton within these fourteen weeks.

Comfortable supply in the distribution market amid slower than expected demand is to blame for the plummet, as traders need to generate cash flow. However, this has given converters a hard time negotiating prices with end product buyers, who have been demanding for similar reduction but face resistance since manufacturers are still having inventories at higher price levels on hand. Sources said that the plastic bag ban is also hitting sentiment hard though it is not finalized yet. 

“We received four price adjustments from local trader this week. We do plan to make some replenishment, but is this the bottom yet?” a buyer received locally produced HDPE film at IDR15,610,000/ton ($1105/ton) said.

A number of other buyers are asking the similar question, and while waiting for the market direction to become clearer, these buyers are planning to remain conservative.