Indonesia PP & PE Markets Continue to Slide as Demand Weakness Persists

Indonesia's polyolefin market remained under pressure in June, with domestic PP and PE prices extending their decline from the record highs seen in mid-April. The latest downturn followed another round of price reductions announced by a major local producer, highlighting the ongoing impact of soft demand and improving supply availability.

While industry participants continue to watch the government's proposal to eliminate import duties on key polymer grades, no formal approval has been announced. As a result, uncertainty over future tariff policy continues to influence market sentiment.

Fresh Price Reductions Add Pressure

A major Indonesian producer lowered domestic PP and PE offers again on June 1, marking the ninth consecutive pricing announcement featuring either stable or lower levels since late April.

The latest PE reductions included:

LLDPE Film:
IDR 25,690,000/ton (Down IDR 590,000)

LLDPE Injection:
IDR 27,650,000/ton (Down IDR 550,000)

HDPE Film:
IDR 26,760,000/ton (Down IDR 740,000)

PP grades recorded sharper declines:

PP Block Copolymer Injection:
IDR 25,870,000/ton (Down IDR 2,860,000)

PP Random Copolymer Injection:
IDR 28,550,000/ton (Down IDR 890,000)

Homo PP Raffia & Injection:
IDR 23,550,000/ton (Down IDR 470,000)

Homo PP Film:
IDR 25,330,000/ton (Down IDR 1,640,000)

BOPP Film:
IDR 24,000,000/ton (Down IDR 970,000)

These cuts continue the correction that began shortly after prices reached unprecedented levels in April.

Market Still Above Pre-Conflict Levels

Despite the recent decline, several major grades continue to trade significantly above levels recorded before the Middle East conflict began.

Homo PP Raffia & Injection:
• Rose 100% during the rally phase
• Down 34% from April peak
• Still 36% above pre-conflict levels

LLDPE Film:
• Gained 112% during the rally
• Down 29% from peak
• Remains 54% higher than pre-conflict levels

HDPE Film:
• Increased 113% during the rally
• Down 27% from peak
• Still 59% above pre-conflict levels

The figures indicate that while much of the war-related price surge has been reversed, the market has not yet returned to its previous pricing levels.

Import Duty Proposal Remains Unresolved

One of the key topics being monitored by market participants is Indonesia's proposal to reduce or remove import duties on polymers such as PP, HDPE and LLDPE.

However, the proposal remains under review, with no official implementation date or final structure announced. If approved, lower duties could improve the competitiveness of imports from suppliers in Saudi Arabia, the UAE, the United States, China and South Korea, potentially increasing import volumes and competition within the domestic market.

For now, the proposal remains a future possibility rather than an active market factor.

Supply Improves but Demand Stays Weak

Market fundamentals continue to lean bearish as domestic supply conditions improve. The normalization of deliveries from local producers has helped ease the supply tightness that previously drove prices sharply higher.

However, some supply constraints remain. While certain PE production units are expected to resume operations, ongoing maintenance at HDPE facilities may keep availability relatively tighter in that segment.

Demand conditions remain challenging. Converters continue to report weak order inflows and limited ability to pass higher raw material costs on to customers. Most buyers are purchasing only according to immediate requirements and remain cautious despite the recent price declines.

Further Downside Still Possible

With supply availability improving, demand remaining subdued, and uncertainty surrounding future import-duty reductions, market sentiment continues to face pressure.

Although prices have already fallen significantly from their historic highs, many participants believe the market has not yet established a clear floor. Unless demand improves substantially or new supply disruptions emerge, additional downward adjustments in Indonesia's PP and PE markets cannot be ruled out in the coming weeks.

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