Indonesia’s PE, PP domestic trade may slow after Mount Kelud erupts

14 February 2014 08:34 Source:ICIS News

SINGAPORE (ICIS)--Indonesia polyethylene (PE) and polypropylene (PP) domestic trades may slow down in the coming weeks because of increased difficulties in delivering cargoes in eastern and central Java following the eruption of  Mount Kelud in eastern Java on 13 February, local industry sources said on Friday.

The delivery of plastics resins and finished goods in central Java had been hampered in recent weeks because of floods in the region, and the situation is expected to worsen in the wake of the eruption of Mount Kelud that killed at least two people, the industry source and media reports said.

A number of airports in eastern and central Java were closed because ashes from the volcano eruption had hampered visibility, and many people have turned to trains and automobiles for transportation across cities on the Java Island, said a source with a local plastics resin producer.

Hence the major land routes in central Java were expected to be even more congested in the coming weeks, thus further hindering the deliveries of plastics raw material and finished goods, the source said.

The extent of the impact on cargo deliveries over major land routes was still unclear, as many plastics processors in central and eastern Java were still assessing the situation, said a PP woven bag maker in Surabaya in eastern Java.

We expect cargo deliveries to slow down a little, but we are still assessing the situation,” said the PP woven bag maker.

As it is the rainy season in Jakarta currently, visibility is expected to improve within the next few days, said a Surabaya-based trader.

A couple of the local traders were optimistic that transportation could resume within days, thereby minimising the impact on deliveries and prices.

Additional reporting by Angeline Soh

By Chow Bee Lin