As informed to SSESSMENTS.COM, the offers for Thai HDPE and LLDPE cargoes to Indonesia market lose premium over China. Following the drastic decreases in PE demand in Indonesia, a Thai PE producer is offering at a lower level to Indonesia than to China market for HDPE Film and LLDPE Film C4. Under the normal market condition, PE prices to the Southeast Asia market carries a premium compared to the offers to China. However, SSESSMENTS.COM’s noted that currently, HDPE Film offers of Thai origin to Indonesia is between $70-80/ton lower compared to the offers to China. While for LLDPE Film C4, the offers from the same Thai producer to Indonesia are around $20-30/ton lower than to China. The Thai producer is offering at much lower prices to Indonesia due to volatile currency movement. In the previous week, the exchange rate recorded at IDR16,700-per US Dollar and as of April 8, the change rate is at IDR16,200-per US Dollar. Another reason for the Thai producer to offer at such levels to Indonesia is to remain competitive as local and localized cargoes are offered at a lower price.
However, market players voice out an opinion to SSESSMENTS.COM that if they were to make procurement, there is a possibility for the exchange rate to reach IDR20,000-per US dollar once the cargoes arrive. Therefore, buyers are unwilling to take the risk to make a fresh procurement. Sources also added that the current acceptable level for import HDPE Film and LLDPE Film C4 of Thai origin is below $700/ton-level. ‘’The producer is having high inventory in Thailand and some inventories at their warehouse in Jakarta,’’ a distributor said. As reported on April 7, the Thai producer made hefty reductions on their offers to Indonesia. Click here to view the story on the price changes.
On April 7, the capital city of Indonesia begins to implement large-scale social restriction as prevention and to curb the spread of Coronavirus. During the period only some economic activities are allowed while schools and offices will be closed. SSESSMENTS.COM also noted that public transportation and other mass gatherings will be banned. Following the situation, the Finance Minister Sri Mulyani Indrawati has warned that if the downturn in the economy sector and Coronavirus issues prolonged, it is possible for Indonesian Rupiah to reach IDR20,000-per dollar. In order to fund its battle against coronavirus and recovery efforts, the Indonesian government sold Asia's first 50-year dollar bond and the deal was finalized on April 6.
