Short supply of prompt PE in Indonesia

29-Jan-10

In Indonesia, distributors and converters report that the market is facing a shortage of promptly-available PE cargoes, driving spot prices for prompt cargoes sharply higher when compared with the past week, as per Chemorbis. Offers for locally-held LLDPE film cargoes are currently being reported at US$1490-1565/ton FD Indonesia, cash equivalent basis, US$10-85/ton higher when compared with the previous week, while offers for locally-held HDPE film stand at US$1440-1700/ton with the same terms, up by ten dollars on the low end and US$255/ton on the high end when compared with the past week. A number of deals were reported done at US$1490-1550/ton for LLDPE film and at US$1445-1635/ton for HDPE film, all on an FD Indonesia, cash equivalent basis. These sudden increases were attributed to sharply reduced supply inside the country, triggered by a shutdown at a domestic producer, to be accompanied by another domestic producer expected to shut down facility at the beginning of next week. Distributors report that domestic producers have slashed their spot allocations in order to ensure sufficient stock levels to meet their contractual obligations.