Indonesia chemicals markets slow down on new COVID-19 restrictions
SINGAPORE (ICIS)–Indonesia’s chemicals markets are expected to slow down as new emergency measures come into effect across major parts of the country from 3-20 July to stem a massive surge in coronavirus cases.
Indonesia’s President Joko Widodo announced on Thursday that COVID-19 control measures will be tightened from 3-20 July for Java and Bali, which make up more than half of the country’s population.
“This PPKM [Emergency Enforcement of Restrictions on Public Activities] will have activity restrictions that are stricter than what we have had so far,” Widodo said in an internet broadcast.
In acetone and phenol end-use factories such as paints and coatings, laminates and plywood, industry sources said that they are running at lower run rates at around 60-70% due to restrictions.
In the fatty alcohol ethoxylates and polyester sectors, players are concentrating on domestic sales rather than exports due to soaring freight costs and paperwork required for shipping out goods.
In the Asian ethyl acetate (etac) market, discussions have drifted lower amid lockdowns in the southeast region. Indonesia is a major buyer of etac.
“Demand will go down in July. Discussions will be postponed for at least two weeks … [market players are in] no mood to buy,” said a regional-based market source.
“Many people on the ground are [COVID-19] infected … hospitals are overwhelmed,” the source said.
Movement under Indonesia’s new emergency measure will be more restricted, with non-essential offices to be closed and dining in not allowed.
Essential sectors, including finance and banking, information technology (IT) and communications, hotels, and exports, have to cut their office capacity to 50%.
Companies in critical sectors, including energy, health, logistics and transportation, and food supply, will be exempted from the measures.
Indonesia reported 24,836 daily new cases and 504 deaths on 1 July.
The country has the highest coronavirus infections in southeast Asia at more than 2.2m, with 58,995 deaths, as of 1 July, World Health Organization (WHO) data showed.
“The more dangerous and deadly Delta COVID-19 variant is fuelling infections that are skyrocketing across Indonesia, overwhelming hospitals and oxygen supplies in Jakarta and other areas of the country,” the Indonesian Red Cross Society said in a statement on 29 June.
More than 20 per cent of COVID-19 tests in Indonesia are positive according to the John Hopkins Coronavirus Resource Center, indicating that the number of people who are sick and infected is likely to be much more widespread.
Focus article by Nurluqman Suratman
Additional reporting by Melanie Wee, Helen Yan and Judith Wang, Angeline Soh and Yuanlin Koh
Photo: Indonesia’s Health Ministry launched on 1 July 2021 mass COVID-19 vaccination for children of 12-17 years old as the national capital held its first mass inoculation for adolescents. (Source: Xinhua/Shutterstock)
Visit the ICIS Coronavirus topic page for analysis of the impact on chemical markets and links to latest news.