Based on the data collected by SSESSMENTS.COM at the moment Indonesian buyers are facing difficulties to source local PE materials, however, they are still showing resistance towards the import offers. In the local Indonesia market, supply for PE is limited. The availability for LLDPE Film C4 is the most limited, followed by HDPE Film. Unplanned shutdown at Indonesia Chandra Asri Petrochemical’s 400,000 tons/year LLDPE plant suspected to be one of the causes of the limited supply. Since early June, the plant has been under an unexpected shutdown. On Monday, June 22 morning, sources claimed the producer restarted the plant, however, in the afternoon the plant was offline again. Besides, the producer is still struggling to clear the backlogs.
Limited supply from Chandra Asri Petrochemical led to a quantity reduction for contract-based customers. In Q3 2020, the producer reduced the volume of LLDPE Film C4 for contract customers between 30-40% from the normal quantity. As a result, Indonesia’s Lotte Chemical Titan Nusantara is receiving a high number of contract requests since Chandra Asri Petrochemical is not aggressively offering to the market. Impact on contract customers is not only seen from the producer’s end. SSESSMENTS.COM noted that the biggest local trading house in the country is also not extending the contract for some customers.
Despite having difficulties to source local materials, Indonesian buyers are still showing resistance towards the high import prices. On the back of high feedstocks prices, foreign suppliers are maintaining the offers firm and not providing any room for negotiation. For Southeast Asian cargoes, offers for HDPE Film, LDPE Film, and LLDPE Film C4 of Thailand origin have increased by $10/ton, $40/ton, and $30/ton respectively, as compared to last week. Indonesian buyers told SSESSMENTS.COM that the offer for Thai LLDPE Film C4 is on a higher level compared to the other origins, hence, buyers have no interest to procure the materials as it is deemed too high. Additionally, the producer is not willing to provide any room for negotiation due to limited supply stemming from the upcoming maintenance shutdown. For Philippines origin cargoes, re-exporters have yet to receive offers from the polyolefins producer and the offers will only be available for certain customers.
From Middle Eastern producers, the leading Saudi polyolefins producer adjusted up the offers for LLDPE Film C4 by $10/ton as compared to the offers in early June. Meanwhile other Saudi PE producers made a huge upward price adjustment as much as $100/ton for HDPE Film and between $90-100/ton for LLDPE Film C4, all compared to the offers for June shipment. Even bids submitted between $10-20/ton lower from the initial offers rejected by the suppliers. For US cargoes, SSESSMENTS.COM noted that offers for LLDPE Film C4 have gone up between $60-70/ton as compared to early June.
According to SSESSMENTS supply and demand database, PlantsSSESSMENTS and StatsSSESSMENTS, Indonesia has a total capacity of 586,000 tons/year of HDPE and 600,000 tons/year of LLDPE. In 2018, Indonesia's consumption of HDPE recorded at 712,000 tons while LLDPE at 762,000 tons. During the specified year, the country imported 394,000 tons of HDPE and 497,000 tons of LLDPE. The country also exports some quantity of HDPE and LLDPE, though at a small quantity of 47,000 tons and 43,000 tons. For LDPE, Indonesia does not have any domestic capacity, therefore relying solely on imports.
