Propylene oxide (PO) contract prices are formula related in Europe, the US and Asia, so they will follow propylene feedstock developments over the coming months.
It remains difficult to gauge direction because of upstream volatility, but if the uptrend seen over the past few months continues for propylene, PO prices will follow suit.
In Asia, there is some expectation that the recent rally in PO spot prices on the back of higher feedstock costs could be losing steam, because of poor derivative price performance and ample derivative inventories.
While global demand into the downstream de-icer sector seasonally draws to an end in March/April, the downstream construction and coatings sectors normally enter into high season in the second quarter.
Downstream automotive consumption is also expected to remain good. Provided upstream propylene in Europe remains competitive with the other regions and the euro remains weak against the US dollar, European PO demand is likely to be boosted by export opportunities.