Unreleased BMDTP Hindered Indonesian Buyers From Procuring Import PP Cargoes
- Leading Indonesian polyolefins producer adjusted local PP prices twice this week
- No deals concluded for import cargoes so far
- PP demand will take some time to recover
Indonesian market players told SSESSMENTS.COM that as the government has not released the BMDTP facility (Customs Duty Borne by Government), import PP offers, especially Middle Eastern cargoes are deemed unworkable. According to a global trading house, import PP Homo Raffia of Middle East origin to Indonesia are available at $830/ton on LC at sight, CIF Indonesia main port basis. However, buyers showed a cold response citing the workable level should be between $740-745/ton on the same payment and delivery term. As the buyers’ buy ideas were deemed too low, the global trading house decided to move all the allocation to the Vietnam market. For Southeast Asian cargoes, June shipment offers for Malaysian PP cargoes to Indonesia edged down by $20/ton as compared to May shipment.
In the local market, the leading Indonesian polyolefins producer has adjusted the offers twice this week. On May 11, offers surfaced with an increase of IDR210,000/ton ($14/ton) for PP Homo Film and IDR110,000/ton ($7/ton) for PP Homo Raffia. However, within a day interval, the producer made further upward price adjustments. On the second price list, SSESSMENTS.COM noted that PP Homo Film and PP Homo Raffia prices increased by IDR150,000/ton ($10/ton) while PP Random Copolymer Injection moved up between IDR150,000-160,000/ton ($10-11/ton). Market talks have it that the producer is having production glitch at the PP plant which led to upward price correction.
Demand for all grades of PP resins remains subdued as demand for the end products have not shown any significant improvement even though some cities have lifted the large-scale social restrictions (PSBB). For the finished products, ongoing demand only reported for woven bags for rice, animal feed, and manure packaging. On the supply front, no significant issues reported by Indonesian market participants to SSESSMENTS.COM.
Looking ahead, the majority of Indonesian market players stated a bearish outlook for the local PP market. Though the large-scale social restrictions in most of the cities in Indonesia are designed to be lifted at the end of May, players are pessimistic that demand will recover soon after that, as stated to SSESSMENTS.COM.
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