Currency Exchange Rate Provided Support To Local PET Offers In Indonesia
- Import PET offers deemed unattractive despite the adjustments
- PET Bottle demand in Indonesia still could not be categorized as strong yet
- Local PET Bottle offers expected to be only hovering within the current level
Market participants informed SSESSMENTS.COM that currency exchange rate provided support to local PET offers in Indonesia. This week, PET Bottle offers from local producers increased by IDR100,000/ton ($7/ton) due to the currency depreciation. While, a local converter stated that the company received stable local PET offers and managed to purchase some volume at IDR300,000/ton ($21/ton) lower than the initial offers at IDR11,300,000/ton ($782/ton) on 30 days credit term, FD Indonesia basis and excluding 10% VAT. In the import market, offers for Chinese PET Bottle cargoes dropped by $10-20/ton compared to last week. Despite the decrement, buyers remain disincentivised. As for Vietnamese cargoes, the offers stood at $710/ton on LC at sight, CIF Indonesia Main Port basis. In addition, as the PET market in Indonesia remains slow, market players prefer to source from the local market instead of importing as they can purchase materials on small volume and on a weekly basis.
In general, PET Bottle demand in Indonesia still could not be categorized as strong yet. Buyers still purchase for short-term production. Moreover, even though most cities have enforced “new normal”, most people prefer to stay at home and buy essential needs only. However, a bottle manufacturer mentioned that the beverages bottle demand has started to improve as more people doing outdoor activities. June sales at a converter’s end were also better than May. Still, on a yearly comparison, sales dropped by 50%. More added, despite the better sales, the converter has to limit orders from customers to avoid cash flow issue. On the supply side, no significant supply issue was reported to SSESSMENTS.COM.
Market players opined that even though the transition period from the large-scale social restrictions (PSBB) into “new normal” in Jakarta is extended until July 16, it would not give significant pressure to businesses. However, some players believe that PET Bottle demand will remain slow in the near term. As for pricing, local PET Bottle offers expected to be only hovering within the current level unless there is a significant change on the currency exchange rate, as stated to SSESSMENTS.COM.
