SSESSMENTS.COM was told that the leading Indonesian PET producer drew concern over the contrary outlook for demand and pricing. Despite the fluctuation of the foreign exchange rate, the producer’s offers for local and export market were kept stable compared to last week. In the local market, the producer heard that there are offers available at below IDR11,000,000/ton ($771/ton)-level. However, the offers could not be considered as market prices as it is usually coming from sellers who have inventory pressure. The producer opined that local PET Bottle offers should be around IDR11,000,000/ton ($771/ton)-level considering the current import offers from China to Indonesia and including the 5% customs duty. As explained further by the producer, other local PET producers have to offers at a really attractive price in order to move cargoes as their target market is limited. While from the producer’s end, it is unnecessary to do such a thing as the company still managed to move some volume to the export market to balance the slow sales in the domestic market.
On the demand front, SSESSMENTS.COM was informed that there is no significant improvement recorded as most customers, especially from the food and beverage sector, are still holding sufficient inventory for both raw materials and finished products. As such, the current situation predicted to persist until July. On the contrary, PET prices predicted to remain stable to slightly increase considering the firm MEG and PTA prices, not to mention the possibility of higher crude oil prices, which all lead to higher production costs and squeeze profit margin. As such, the producer foresees a cloudy outlook for PET market onwards.
