Indonesia has the largest Muslim population in the world, and Ramadan is arguably the biggest holiday season in Muslim-majority Indonesia. In the Islamic calendar, the timing of Ramadan varies from year to year. In 2023, Ramadan lasts from March 23 to April 21, and Eid al-Fitr falls on April 22. Eid al-Fitr for Indonesia is equivalent to the Chinese Spring Festival, Christmas in Western countries. Most Muslims come back to their hometowns to spend the holidays with their families. Since the outbreak of Covid-19 pandemic, the Indonesian government had banned people from returning home for Eid al-Fitr for two consecutive years. In 2022, people fully vaccinated were allowed to return home as the epidemic eased.
In 2023, as the epidemic eases and people’s lives gradually recover, a boom in travel demand has emerged, and passenger flows keep rising. Jakarta, Indonesia’s capital, is regularly listed as one of the most congested cities in the world, with more than 20 million vehicles compete for space on its streets and roads every day. Jakarta has recently once again seen a significant increase in its traffic congestion, while the traffic jam is not as serious as the pre-pandemic bustle in 2019. The homecoming movement is expected to peak around the Eid holiday.
Figure 1 Indonesian Vehicles Sales from 2021 to January 2023
88% of Indonesians are planning to make a purchase this Ramadan, according to a recent survey of more than 2,000 Indonesians by global advertising technology company The Trade Desk and research firm YouGov. Before Tunjangan Hari Raya(THR), a mandatory religious holiday bonus, was given, more than 50% of Indonesian consumers had already made their major purchases such as motorcycles, cars and home appliances in advance for Ramadan. Looking back on the spring of 2022, as Eid approached, Indonesian automakers were offering unprecedented discounts, just like China’s Double 11. One of the hottest events was Indonesia International Motor Show (IIMS) at JIExpo Kemayoran in Jakarta, where most car brands, from not only Indonesia, but also Japan, South Korea and China, gave special offers to attract potential consumers.
To celebrate Eid al-Fitr, people generally start looking for and purchasing products a month in advance. As people need to return to their hometowns to reunite with their families, a strong desire to buy cars is generated. Vehicle sales in March 2021 and 2022 increased by 72.6% and 21.3% month-on-month, respectively, and it is expected that Indonesian vehicle sales will also usher in a sharp increase in March this year. The automobile industry is one of the major downstream industries of polyurethane. The main applications of PU flexible slabstock polyols in automobiles include sun visors, door panels, seals and weatherstripping, headliners, carpet backings, seat cushions, backrests, headrests, etc. During Ramadan, car sellers will launch some marketing initiatives to promote sales growth, when polyurethane consumption will be further boosted.
Figure 2 Flexible Slabstock Polyols Price Trends in Indonesia and Southeast Asia, 2021-2023 (USD/tonne)
The prices of flexible slabstock polyols in Indonesia showed a downtrend since 2021 owing to the epidemic. Nevertheless, in 2023, the flexible slabstock polyols market began to rise due to higher costs. It is projected that Indonesian flexible slabstock polyols prices in March may keep moving up thanks to growing demand amid Ramadan.
