Jakarta. A surge in cheap plastic raw material imports from China, allegedly sold at dumping prices, is putting increasing pressure on Indonesia’s petrochemical industry, prompting calls for immediate government trade safeguards to prevent upstream producers from losing further competitiveness.

Fajar Budiono, secretary general of the Indonesian Olefin, Aromatic, and Plastic Industry Association (Inaplas), said imports of several key plastic raw materials from China have risen significantly in volume while being sold at considerably lower prices.

“Imports of PE, PP, PVC, and PET plastic raw materials from China have increased quite significantly in terms of volume. They are also slashing prices, making their products cheaper than others,” Fajar told reporters in Jakarta.

The pressure is increasingly being felt by domestic petrochemical producers as their ability to maintain profit margins narrows. At the same time, the industry continues to grapple with high energy costs, further weakening its competitiveness.

“If no policy action is taken soon, utilization rates in the upstream industry will decline. For PET and PVC, we are forced to export at very thin margins, which continues to erode corporate profits. On top of that, there is still no certainty over the special gas price policy, or HGBT, while non-HGBT gas prices of around $13 per MMBtu are severely undermining the industry’s competitiveness,” Fajar said.

The pressure comes despite strong domestic demand. Indonesia still relies heavily on imports for several types of plastic raw materials, making the country a target for low-priced foreign products. The situation has been exacerbated by shifts in global trade flows that have driven more Chinese exports into the Indonesian market.

“PE demand in Indonesia stands at around 2 million tons, while domestic supply is only about 1.2 million tons, leaving imports at roughly 800,000 to 900,000 tons. For PP, demand reaches around 2.1 million tons, but domestic supply is only about 900,000 tons, meaning imports still amount to around 1.2 million tons,” Fajar said.

The influx of low-priced imports has also begun to affect industrial operations. Several companies have reduced working hours, although no layoffs have yet been reported. The impact has also spread to supporting sectors, including logistics and cargo handling services.

“There have been no layoffs in the upstream industry so far, but reductions in working hours have already begun. Companies that previously operated on shift systems have switched to daily operations. If this situation continues, it could eventually lead to layoffs. Meanwhile, indirect workers in cargo handling, logistics, and other supporting companies have already seen reduced activity,” Fajar said.

According to Fajar, the industry is assessing various protective measures, including the possibility of filing for anti-dumping measures. However, the process remains challenging as it requires official data and coordination across ministries and government agencies, which he said has been slow.

“We hope the government will take the lead in implementing these trade safeguards. Agencies should not wait for one another. Coordination among ministries, access to data from Statistics Indonesia and Customs and Excise, and proceedings before the anti-dumping committee must all be accelerated. If the process takes too long, the industry could die before protection is finally granted,” he said.

Energy costs remain another major challenge for the petrochemical industry. Beyond raw materials, which account for the largest share of production costs, gas prices are also seen as a key factor determining whether domestic producers can compete with imported products.

“If dumping practices are allowed to continue, investors will postpone new investments until the issue is resolved. New investment interest may only return after 2030, but by then, existing industries could have already collapsed. That is why the government must immediately impose anti-dumping measures to ensure domestic industries can survive and prevent the investment climate from deteriorating further,” Fajar said.