Indonesia’s PP and PE Markets Take Different Paths as PP Prices Rebound

Indonesia’s domestic polyolefin market started August with contrasting movements in PP and PE, following a strong recovery during the second half of July. While PE prices continued to move higher on a weekly basis, PP remained below the previous week’s levels despite a sharp recovery in offers announced by a major local producer on Tuesday.

The earlier July gains had pushed the weekly average price of homo-PP raffia to its strongest level in almost three months. HDPE and LLDPE film prices, meanwhile, reached roughly one-month highs, reflecting the more pronounced rise in PP.

This week began with another round of PP reductions, keeping the material lower on a week-over-week basis. PE, however, continued to show a firmer trend. The market turned more volatile on Tuesday when a major Indonesian producer changed its PP price list three times in one day, raising selected grades significantly.

The sudden reversal was supported by firmer energy markets and tighter availability of some PP grades. However, Tuesday’s increases only recovered part of the losses recorded over the previous few sessions, leaving PP prices still below last week’s levels.

PP Prices Recover After Heavy Reductions

On Monday, the major producer extended its PP price cuts for a fourth consecutive round. PPRC injection was reduced by IDR1,170,000/ton ($66/ton), while PPBC injection, homo-PP raffia, homo-PP injection and BOPP film were lowered by IDR1,160,000/ton ($65/ton). Homo-PP film saw a smaller reduction of IDR80,000/ton ($4/ton).

PE moved in the opposite direction. LLDPE film and injection prices increased by IDR240,000/ton ($13/ton) and IDR230,000/ton ($13/ton), respectively, while HDPE film prices remained unchanged.

The situation changed sharply on Tuesday. The producer announced three separate PP revisions during the day, targeting homo-PP and BOPP grades, while PE, PPBC injection and PPRC injection prices were left unchanged.

The first revision increased homo-PP raffia, homo-PP injection and BOPP film by IDR370,000/ton ($21/ton), while homo-PP film rose by IDR360,000/ton ($20/ton). A second adjustment added another IDR360,000/ton ($20/ton) to all four grades, followed by a further IDR540,000/ton ($30/ton) increase in the third revision.

Overall, the three adjustments resulted in cumulative increases of IDR1,270,000/ton ($71/ton) for homo-PP raffia, homo-PP injection and BOPP film, and IDR1,260,000/ton ($70/ton) for homo-PP film.

Despite the sizeable rebound, PP has not fully recovered from the reductions implemented since last week. As a result, PP remains lower week over week, while PE continues to post weekly gains.

Seller Confidence Returns, But Increases Remain Selective

The decision to revise PP prices upward three times in one day represents a clear shift from the aggressive price reductions seen through Monday. Market participants linked the change to firmer upstream energy values as well as comparatively tighter availability of homo-PP and BOPP grades.

The quick succession of increases indicates that the producer was responding rapidly to changing cost and supply conditions following the correction in PP prices from their July highs.

However, the increases were not applied across the entire polyolefin range. PPBC and PPRC injection grades remained unchanged, as did all PE grades. This selective approach suggests that supply conditions differ between PP grades rather than indicating a broad tightening of the Indonesian market.

Buyers Remain Cautious

Before Tuesday’s reversal, improved PP availability and resistance to high prices had contributed to the recent downward correction. Supply constraints had supported the July rally, but better availability subsequently gave buyers greater negotiating power.

A converter in Jakarta said the company had purchased two shipments at a slight discount after running out of inventory, despite the prevailing high prices. According to the buyer, supply is now more comfortable than it was last month, which could increase pressure on sellers.

The converter also noted that end-product demand remains normal and order flows are stable, but further purchases would depend on prices reaching more acceptable levels.

A converter in Semarang similarly indicated that no additional purchases were planned in the coming weeks unless prices declined substantially, describing downstream demand as only moderate.

The latest PP increases could therefore face resistance from cautious buyers. While tighter availability of specific grades has strengthened sellers’ position, subdued downstream demand and limited purchasing appetite may restrict the market’s ability to sustain a broader price increase.

Energy Markets Add to PP Price Volatility

Developments in upstream energy markets have also contributed to the recent swings in Indonesian polyolefin pricing. After considerable fluctuations since late July, energy values strengthened again this week, with Brent crude moving close to $88/bbl in the latest settlement.

The renewed firmness in energy markets appears to have supported the producer’s decision to quickly reverse its PP pricing strategy on Tuesday. However, the sharp changes within a short period highlight the uncertainty currently affecting Indonesia’s polyolefin market.

PP moved from substantial reductions at the start of the week to cumulative increases of around $70/ton for selected grades the following day. These increases have reduced, but not eliminated, PP’s weekly losses.

PE, in contrast, has maintained a steadier upward direction compared with the previous week. For now, Indonesia’s PP and PE markets therefore remain on different weekly trajectories, while the latest PP rebound indicates that higher upstream costs and tighter availability for certain grades could provide support against further declines.

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