Domestic PP, PE prices facing downward pressure in Indonesia

11-May-12
Players in Indonesia report that domestic PP and PE prices are facing downward pressure as international trends have softened and upstream costs have recorded sharp downward movements, as per ChemOrbis. Despite this, domestic prices have held largely steady in the country over the past few weeks as domestic producers keep prices at elevated levels, while distributors, who are often offering significantly below the producer price level, have also refrained from implementing any additional price cuts. In the PP market, a producer reported that they left their offers to the domestic market unchanged for the fourth consecutive week. “We are still struggling to fulfill our back orders from a recent plant shutdown and are currently operating our plant at around 80% of capacity due to some ongoing technical difficulties. As we are still working on clearing our back orders and have not been able to restore full operating rates at our plant, we feel that we will not need to make any adjustments on our prices over the near term,” a producer source told ChemOrbis. Buyers generally kept to the sidelines over the past week, as they are mostly covered for now and that they want to see some reductions in prices before making any additional purchases. A converter in the household products sector commented, “We are not planning to make any fresh purchases for now as we think prices still have some room to move lower. One domestic producer is currently close to the distribution market level while another producer is giving offers well in excess of the prevailing local levels.” A converter in the film packaging sector also reported that they are waiting to see some decreases before purchasing. “We are in no rush to purchase as we expect to see lower prices in the days ahead,” the converter commented. Another converter in the woven bag sector also expressed their intention to hold out for lower prices. “We have enough material in stock to meet our needs for the next two months. As PP prices are moving lower in international markets, we have elected to retreat to the sidelines in anticipation of seeing lower prices in the days ahead,” the buyer stated. In the PE market, a producer said that they left their offers unchanged once again this week as they are still struggling with some supply limitations. “We will switch our HDPE/LLDPE swing plant to HDPE soon and we believe that local LLDPE supplies will remain tight as we are still working to clear our backlogs for now. We feel that it will be at least one more week before the declines in upstream costs make a real impact on domestic PE prices,” a producer source reported. As is the case in the PP market, PE buyers mostly stuck to the sidelines this week as they expect to see lower local prices in accordance with weakening international trends. A plastic bag manufacturer reported that they sourced some Thai LLDPE film from the distribution market this week at prices significantly below the producer price list. “We think that we will be able to negotiate with domestic producers soon given bearish sentiment in international markets and lower upstream costs,” the buyer reported. A converter in the packaging sector added, “We are proceeding cautiously with our purchases for now as we believe that prices will begin to move lower in the days ahead.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha