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Indonesian buyers appear to be making final replenishment this week before the Ramadan road ban take place starting 18 June. Domestic suppliers reported to have concluded a healthy number of deals for both PP and PE even after some moderate price increment implemented on homo-PP cargoes.

Earlier this week, a major domestic producer lifted homo-PP prices by $10/ton while reducing PE by $10-20/ton. At the meantime, a fire broke out at Chandra Asri’s plant last Saturday. There is no shutdown required, however the producer is forced to lower operating rate at its 860,000 tons/year naphtha cracker to about 75%.

A buyer commented, “We think domestic prices might firm up in the post holidays term as major local producer is not facing any inventories pressure. Therefore, we made additional replenishment this week. Traders are also lifting prices as buying interest pick up.”

In fact, distribution market is rather active with traders implemented larger hike on homo-PP cargoes by $20/ton while maintaining PP prices unchanged week on week basis. “Sales are smoother this week, hence we concentrate on depleting on hand cargoes. By next week, all transactions would only be delivered in July; hence, we are also facing some minor issues regarding truck arrangement,” a trader said.

Another trader added, “We are happy with the number of deals concluded today. The recent incident at Chandra Asri’s plant caused great concern over the supply condition in the coming month. Buyers therefore, prefer to procure additional stock.”

Local prices in Indonesia based on FD, cash term, excluding VAT currently stand at:

LLDPE film $1147-1166/ton
HDPE fim $1110-1155/ton
Homo-PP $1120-1165/ton