Falling import market pressure local PET market in Indonesia

Import offers for Chinese PET to Indonesia have been steadily going lower for four consecutive weeks that shred nearly $90/ton in value along the way. This is a result of falling demand in the traditional off-peak season while supply is improving. Such development is affecting the local ground across the region and Indonesia market is no exception despite steady buying interest here.

Latest offers from domestic suppliers see IDN500,000/ton ($34/ton) reduction week on week to approximate IDR21,000,000/ton ($1446/ton) excluding VAT, FD Indonesia, cash equivalent. A trader said, “Demand was still good last week, but things just turn-off suddenly this week. Customers are waiting for further reduction.”

Demand for PET in Indonesia in the post-Ramadan term normally sees some improvement, as buyers need to replenish cargoes after the long break. “However, buyers are retreating to the sideline now and if import offers continue to drop, demand would be tapered further,” another trader added.

Supply in the local ground is improving after a major producer here managed to restore regular run rate from persistent technical issues in June. “Our sales were smooth in the previous week and drop visibly this week. Besides the pressure from the import ground, the constant weakening Indonesian Rupiah is deterring buyers from additional buy. Many are waiting for the better exchange rate,” a producer commented. 

It is expected that demand for PET bottle in Indonesia would pick up in September, and therefore, Indonesian suppliers believed the current downtrend might only be temporary.