Indonesia PP & PE Markets Rebound as Rising Costs Boost Prices

Indonesia’s domestic PP and PE markets have moved higher for the first time since late April, ending nearly three months of continuous price declines. The recovery has been driven mainly by a sharp rise in crude oil and feedstock prices following renewed tensions in the Middle East, which strengthened producers’ pricing power and improved overall market sentiment.

The rebound comes after local polymer prices had almost returned to pre-conflict levels during the recent correction. However, the latest surge has reversed a significant portion of those losses, with PP outperforming PE due to tighter supply conditions.

Major producer continues aggressive price increases

A leading Indonesian producer, after reducing prices at the beginning of last week, quickly changed direction and announced five consecutive rounds of price hikes. The latest revision, released on July 20, reflects growing confidence among sellers as production costs climbed and market conditions improved.

Following these increases, cumulative PE price gains reached IDR3.73 million/ton for LLDPE Injection, IDR3.53 million/ton for LLDPE Film, and IDR3.34 million/ton for HDPE Film. PP recorded even stronger gains, with Homo PP Raffia rising IDR5.52 million/ton, while other PP grades increased by around IDR5.16–5.18 million/ton.

PP outperforms PE on tighter supply

Although higher crude oil and feedstock costs supported both PP and PE markets, PP witnessed a stronger recovery due to tighter local availability. Limited import arrivals and production disruptions at another domestic producer reduced PP supply, giving sellers greater pricing power.

PE supply remained comparatively more balanced, although availability was still not abundant. Market participants noted that material could still be sourced, but inventories were not excessive.

As a result, domestic prices have moved further above their pre-conflict levels. Homo PP Raffia now trades around 37% above its pre-conflict average, while HDPE Film and LLDPE Film remain roughly 32% and 30% higher, respectively.

Current Premium vs Pre-Conflict Levels

Homo PP Raffia
Current Premium: +37% above pre-conflict level

HDPE Film
Current Premium: +32% above pre-conflict level

LLDPE Film
Current Premium: +30% above pre-conflict level

Restocking supports buying activity

Buying activity improved during the week as many converters returned to the market to replenish low inventories before prices climbed further. This resulted in stronger trading compared to previous weeks, with buyers securing material mainly to avoid higher replacement costs.

However, the improvement was largely driven by precautionary restocking rather than stronger end-user demand. Downstream consumption remains weak, and order inflows continue to be slow. Most market participants believe that while recent transactions have increased, the market still requires a meaningful recovery in consumption to support a sustained upward trend.

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