As SSESSMENTS.COM noted, supply factor forestalls domestic PP offers from tumbling and puts Indonesian buyers in a dilemma. On the week starting June 15, the latest price list for PP Homopolymer grades from the leading Indonesian polyolefins producer remained stable from a week earlier. Via the largest local trading house, offers for local and localized Thai PP Homo Film surfaced with an increase of between IDR400,000-500,000/ton ($28-35/ton) on a weekly comparison. Meanwhile, localized offers for PP Homo Raffia of Southeast Asia origin were stable from last week’s level. Some players mentioned that the latest pricing decision made by producers and traders was driven by the low supply on their hands. The leading Indonesian polyolefins producer reportedly has limited stocks since a fortnight ago as the company needs to fulfil the demand of their contract customers in China. At the same time, the largest local trading house in the country intends to maintain the inventory at a low level since last April.
Despite the firm prices, demand for PP resins has been quite healthy in the past few weeks as supported by the supply shortage. Most buyers actually had no choice but secure some volumes in anticipation of further price increases or worse scenario, sellers will run out of cargoes to offer, and buyers would be unable to get any in the days to come. As such, some converters decided to purchase some raw materials although demand for their finished products has yet to show any significant improvements, SSESSMENTS.COM was told.
Additionally, some deals for local PP Homo Raffia closed at IDR13,800,000-13,900,000/ton ($971-978/ton) on cash, FD Indonesia basis and excluding 10% VAT. Such a level makes import PP Homo Raffia cargoes unworkable in the Indonesia market, some traders commented to SSESSMENTS.COM. Currently, most import cargoes surfaced at above $900/ton-level, which is quite high compared to deals in the local market that are equal to $900/ton-level. Due to this, most local buyers decided to skip procurement for import materials. For the outlook, Indonesian market players believe that local PP offers will maintain its stability or even slightly increase onward considering the supply issues.
