Indonesia PP & PE Markets Extend Decline as Buyers Await Import Duty Decision

Indonesia’s polyolefin market continued to weaken in early June, with domestic PP and PE prices falling further after another round of reductions from a major local producer. The latest cuts reflect ongoing pressure from soft demand, improving supply availability, and uncertainty surrounding the government's proposed import-duty revisions.

Although prices have corrected sharply from the record highs seen in April, most grades continue to trade well above levels recorded before the Middle East supply disruptions began earlier this year.

Fresh Price Cuts Hit Domestic Market

A major Indonesian producer announced new reductions across both PP and PE grades, marking the ninth consecutive pricing revision featuring stable-to-lower levels since late April.

PE grades recorded moderate declines, while PP products saw more aggressive reductions as sellers continued adjusting offers to match weak market demand.

Latest Domestic Offers (FD Indonesia)

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 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)

Market Gives Back Part of Earlier Rally

After surging to historic highs in mid-April, both PP and PE markets have entered a correction phase.

Homo PP Raffia & Injection:

* Reached record high in April
* Down 34% from peak
* Still 36% above pre-conflict levels

LLDPE Film:

* Peaked in mid-April
* Down 29% from peak
* Remains 54% above pre-conflict levels

HDPE Film:

* Reached all-time high in April
* Down 27% from peak
* Still 59% higher than pre-conflict levels

The data indicates that a large portion of the earlier war-driven rally has been reversed, although prices have not yet returned to levels seen before the supply shock.

Import Duty Proposal Remains Uncertain

Market participants continue to closely follow the government's proposal to reduce or eliminate import duties on key resin grades, including PP, HDPE, and LLDPE.

However, no official implementation has been announced so far. As a result, buyers and sellers remain uncertain regarding both the timing and final structure of any policy changes.

If approved, lower import duties could improve the competitiveness of cargoes from major non-ASEAN suppliers such as Saudi Arabia, the UAE, the United States, China, and South Korea, potentially increasing import volumes and competitive pressure in the domestic market.

Supply Improves While Demand Stays Weak

Market fundamentals remain largely bearish. Domestic supply conditions have improved following the normalization of deliveries from local producers, helping ease the shortages that previously fueled rapid price increases.

However, supply remains uneven across some grades. While certain PE production units are expected to restart, HDPE availability may remain relatively tighter due to ongoing plant maintenance activities.

Demand continues to disappoint, with converters reporting weak order intake and limited ability to pass higher costs to end-users. Most buyers are purchasing only for immediate needs and remain cautious despite the recent decline in prices.

Further Price Pressure Still Possible

The combination of improving supply, weak consumption, and uncertainty surrounding future import-duty reductions continues to weigh on market sentiment.

While HDPE may receive some support from tighter availability, many market participants believe PP and PE prices could face additional downward adjustments unless demand improves significantly or new supply disruptions emerge in the coming weeks.

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