Turnarounds add momentum to Indonesia’s local PE market rally

The Indonesian domestic PE markets have been bullish since mid-June as local producers kept raising prices as energy and ethylene costs kept rising incessantly, with a fresh impetus seen recently from turnarounds in the country.

ChemOrbis Price Index data shows Indonesian local prices of HDPE and LLDPE film have so far risen by 10-11%, and the HDPE blow moulding grade by about 4% since the week beginning June 19. The HDPE film market has reached a seven-month high, while LLDPE film has hovered around the highest levels since early May.



The prices are currently noted at IDR18,690,000-19,000,000/ton ($1210-1230/ton) for HDPE film, IDR18,200,000-18,250,000/ton ($1179-1192/ton) for HDPE blow moulding and IDR18,200,000-18,500,000/ton ($1179-1198/ton) for LLDPE film, all on FD Indonesia, cash basis.

Feedstock prices have seen a persistent rise over the past three months. Ethylene prices have risen by about 20-22% over the said period, according to ChemOrbis Price Index data. The underlying crude prices, currently trading above $90/bbl, have also rallied by about 26%. Ethylene prices are currently assessed at $880-890/ton CFR China and Southeast Asia.

At the same time, market participants have noted further momentum to the bullish trend from turnarounds in the Indonesian market. ChemOrbis Production NewsPro report two plants -125,000 tons/year of HDPE and 200,000 tons/year of LLDPE- of PT Lotte Titan in Indonesia have been shut since September 1 for about a month.

Traders said the demand in Indonesia was strong as the plant shutdowns had created a shortage of supplies. “Regional demand has been robust, especially in Indonesia because of the shutdowns. Supplies have tightened and converters have started picking up additional shipments to hedge against further increases in prices,” said a regional trader.