Indonesia confirms injury from LLDPE import surge, paving the way for safeguard duties

Indonesia’s trade safeguard authority has concluded that a sustained surge in linear low-density polyethylene (LLDPE) imports has inflicted serious injury on domestic producers, clearing a critical procedural hurdle toward the imposition of safeguard duties.

The Komite Pengamanan Perdagangan Indonesia (KPPI) said its investigation found that imports of LLDPE, classified under HS codes 3901.10.92 and 3901.40.00, rose steadily between July 2021 and June 2024, consistently outpacing domestic production and eroding industry performance.

According to KPPI’s final determination, Indonesia’s two LLDPE producers — Chandra Asri Pacific and Lotte Chemical Titan Nusantara, which together account for 100% of national output — suffered declines in production volumes, domestic sales, capacity utilisation, and productivity, while financial losses widened over the review period.

The import increase was largely attributed to shipments from Malaysia, Thailand, Singapore, the US, and Saudi Arabia. KPPI noted that the surge was exacerbated by unforeseen developments, including India’s Quality Control Order and a broader regional oversupply that redirected volumes into the Indonesian market.

The committee concluded that the deterioration in domestic industry performance was directly caused by the rise in imports. It found no evidence that other factors — such as plant maintenance shutdowns, technological disadvantages, or product quality issues — played a material role in the injury.

Based on its findings, KPPI has recommended the imposition of a three-year safeguard duty on LLDPE imports. The proposed measure would start at IDR 2.75 million/ton in the first year, with the rate tapering in subsequent years:

KPPI said its published report will set out the full investigative framework, including submissions from exporting countries and industry stakeholders, the assessment of unforeseen developments, and the rationale underpinning the duty levels. The report will serve as the formal basis for the government’s next steps toward implementation.

In its notification to the World Trade Organisation, KPPI confirmed that it has submitted the safeguard recommendation to the Government of the Republic of Indonesia. The measure will enter into force upon approval by the Ministry of Finance and subsequent promulgation in the Official Gazette.

Written by: Farid Muzaffar

Edited by: Rochelle Nguyen