Unexpected plant shutdown fails to cease local PP downturn in Indonesia
Polytama shuts PP plant due to C3 disruption
Indonesia’s Polytama Propindo shut its 386,000 tons/year PP plant at Balongan on March 29 due to the shutdown at its propylene supplier, PT Pertamina. The producer hasn’t revealed a restart date for its PP plant yet.
According to local media sources, the country’s largest oil refinery was hit by a huge explosion early last week. Operated by the national oil company, Pertamina, the refinery has a capacity of 125,000 bbl/day. The producer shut its 400,000 tons/year propylene plant as a safety precaution after the fire.
A local converter said, “We don’t think the explosion will deeply affect the market as supply from them is just a small amount. Buyers can import PP and there is no need to rely on local supply.”
Local prices down around 4% in 2 weeks
Data from ChemOrbis Price Index reveal that Indonesia’s local homo-PP raffia market retreated from a more than 6-year high two weeks ago. Since then, the weekly average of FD Indonesia prices has lost a total of 4%.
A major domestic producer applied additional decreases of IDR150,000-430,000/ton ($10-30/ton) on its local offers early last week.
Competitive Chinese offers affect buying sentiment
Competitive offers from China continued to affect buying sentiment in Indonesia as buyers shied away from fresh purchases in anticipation of seeing further price cuts. Despite lower local supplies, the market remained under downward pressure, players said.
“We are currently purchasing some material from China as their offers are quite aggressive,” a local converter said.
Chinese homo-PP raffia was traded at as low as $1340/ton CIF Indonesia, cash, last week. That level was quite competitive compared to offers for other origins standing at/above $1460/ton with the same terms.
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