Global Dimethyl Ether Market - 2023-2030

Global Dimethyl Ether Market - 2023-2030

Market overview

The global dimethyl ether market was worth US$ XX million in 2022 and is estimated to reach US$ XX million by 2030, growing at a CAGR of XX% during the forecast period (2023-2030).

Ethers are a group of organic compounds in which the oxygen atom is connected to two alkyl or aryl groups. Dimethyl ether, abbreviated to DME, also known as methoxy methane, is the simplest ether. It is a colorless and odorless gas with a very low boiling point. Dimethyl ether can be obtained from various sources such as methanol, coal, natural gas and biomass. The catalytic dehydration of methanol is the main method used for the industrial production of dimethyl ether. Blending with liquified petroleum gas, aerosol propellants and laboratory solvents are some of the various applications of dimethyl ether.

Market Dynamics

The increasing demand for cleaner fuels drives the global dimethyl ether market. The difficulty of mass production is the key challenge to the growth of this market.

Increasing demand for cleaner fuels

Traditional vehicles such as gasoline and diesel emit pollutants such as carbon dioxides, nitrous oxides and particulate matter from unburned hydrocarbons. The vehicular emissions cause massive air pollution and a rise in carbon emissions. The use of coal for heating and power generation also leads to smog formation. Persistent air pollution leads to various respiratory disorders and heart and lung diseases.

Liquified Petroleum Gas (LPG) is a cleaner fuel. The combustion of natural gas leads to fewer air pollutants and carbon emissions than coal and petroleum products. Therefore, it has generated great demand for cleaner fuels like compressed natural gas as governments globally look to mitigate the problems of air pollution and rising carbon emissions.

Nuclear power plants require high capital investment and long construction lead time. Wind and solar energy are intermittent and unreliable for providing base power. Natural gas is the only major fuel source that can provide power generation, heating and cooking without significant pollution. Blending with natural gas is one of the major applications of dimethyl ether. The rising demand for clean fuel will be a key driver of the growth of the market.

Strict government regulations

Dimethyl ether is an environmentally friendly chemical with wide-ranging applications across various industry verticals. However, more than 65% of the dimethyl ether produced globally is blended with liquified petroleum gas. Dimethyl ether can be blended with liquified petroleum gas and used for domestic cooking and heating. Blends containing up to 20% dimethyl ether generally require no modifications to equipment or distribution networks. However, blending more than 20% by volume, the regulations change drastically and more stringent norms are applied.

The entire distribution network and gas handling equipment must be completely changed to industrial rather than domestic and commercial specifications. Distributors and producers incur high costs to bring about this transformation. It hampers the commercial adoption of larger volume dimethyl ether blends. Currently, work is underway to create a unified system of valves, gaskets and cylinders for pure liquified petroleum gas and dimethyl ether blends. The International Organization of Standardization (ISO) is expected to release new unified guidelines and regulations for using LPG and dimethyl ether blends. So far, the stringent government regulations prevent the wider adoption of blended natural gas and are a key challenge to the market's growth.

COVID-19 impact analysis

The global COVID-19 pandemic had an uneven impact on the value chains and sales of the global dimethyl ether market. Aerosol propellant applications such as cleaning sprays and sanitizers saw a considerable increase due to growing attention toward sanitation and hygiene. Transportation applications saw steep declines as governments globally imposed lockdowns of varying durations starting from March 2020. The demand improved somewhat by late 2020, although it won't be restored to pre-pandemic levels before the end of 2021.

The supply chain disruptions caused by the COVID-19 pandemic have knocked on the dimethyl ether market. The supply of raw materials has been hampered, which rendered the industry unable to meet the global demand. It has, in turn, driving up prices, thus contributing to global inflation.

The pandemic will have a negligible impact on the medium to long-term growth of the global dimethyl ether market; companies are expected to gradually ramp up capacity utilization as economic activity returns to pre-pandemic levels. The demand for dimethyl ether remains strong and is expected to grow gradually in the coming years.

Segment Analysis

The global dimethyl ether market is segmented into source, application and region. The global dimethyl ether market is segmented into methanol, natural gas, coal and biomass. Methanol is leading in this segment. Dimethyl ether is produced in industrial quantities mainly through the dehydration reaction of methanol.

Chemically ultrapure methanol is vaporized and dehydrated to yield dimethyl ether in a fix-bed reactor by using a catalyst such as alumina or silica. The reactor effluent is then discharged to the dimethyl ether distillation section. The remaining mixture of methanol and water is then discharged into the methanol distillation tower. The methanol is recirculated back into the methanol stream. Water is the only by-product of the production process.

Geographical Analysis

Asia-Pacific is leading in the global compressed natural gas market. Asia-Pacific is the most populous region, with a population of 4.3 billion. The region generates significant energy demand. Some of the most rapidly industrializing countries, such as China, India, Vietnam and Indonesia, are also located within the region, further driving up energy demand. Dimethyl ether is primarily used for blending in compressed natural gas (CNG).

CNG vehicles are mainly used on a large scale in China, Malaysia, Pakistan, Indonesia and Thailand. Due to the high price of petroleum-based fuels like gasoline and diesel, the usage of CNG has become a more attractive economic option for consumers from middle-income households. Commercial vehicles such as taxis are increasingly adopting CNG due to lower operating costs and higher profit margins.

Dirty fuels like coal for power generation and heating led to thick smog and extremely high levels of air pollution in all major Chinese cities. Hence, China is switching to cleaner fuels like CNG to mitigate pollution and improve urban air quality. India is also experiencing rising adoption of CNG for vehicle fuels.

Natural gas blending consumes nearly 65% of global dimethyl ether production. The growing demand for natural gas in Asia-Pacific is expected to drive the demand for dimethyl ether. Asia-Pacific will retain the largest market share in the global dimethyl ether market in the coming years.

Competitive Landscape

The global dimethyl ether market is competitive due to the availability of formulations from different manufacturers for various end-use applications. Some of the major players contributing to the growth in the segment are Akzo Nobel N.V., Dow, Mitsubishi Gas Chemical Company, Inc., Nouryon, Ferrostaal GmbH, Royal Dutch Shell PLC, Nouryon, China Energy Limited, Jiutai Energy Group and Zagros Petrochemical Company. The major market players adopt several growth strategies, such as new product launches, capacity expansion, joint ventures and collaborations, contributing to the growth of the global industry.

Akzo Nobel N.V.

Overview:Akzo Nobel N.V. is a multinational chemical company among the world's largest chemical producers. It produces various chemicals, including performance chemicals, paints, polymers, industrial solvents, catalysts and coatings. The company operates 390 production sites through subsidiaries and joint ventures in more than 80 countries. Akzo Nobel N.V. was founded in 1994 through the merger of AKZO and Nobel Holdings. The company is headquartered in Amsterdam, Netherlands.

Product Portfolio
• Dimethyl Ether (DME) is obtained through the dehydration of methanol. Chemically ultrapure methanol is vaporized and dehydrated to yield dimethyl ether in a fix-bed reactor by using a catalyst such as alumina or silica. The reactor effluent is then discharged to the dimethyl ether distillation section. The remaining mixture of methanol and water is then discharged into the methanol distillation tower. The methanol is recirculated back into the methanol stream. Water is the only by-product of the production process.

Key Developments: In January 2021, Akzo Nobel N.V. announced doubling the dimethyl ether production at its Rotterdam Europoort plant to nearly 45,000 tons a year. The production growth is expected to meet the growing demand for the aerosol propellants market.

Why Purchase the Report?
• Visualize the composition of the dimethyl ether market segmentation by source, application and region, highlighting the critical commercial assets and players.
• Identify commercial opportunities in the dimethyl ether market by analyzing trends and co-development deals.
• Excel data sheet with thousands of global dimethyl ether market-level 4/5 segmentation data points.
• PDF report with the most relevant analysis cogently put together after exhaustive qualitative interviews and in-depth market study.
• Source mapping in excel for the critical product of all major market players

The global dimethyl ether market report would provide access to approx.: 57 market data tables, 66 figures and 188 pages.

Target Audience 2022
• Plastics and petrochemical manufacturers
• Dimethyl ether manufacturers
• Application Investors/Investment Bankers
• Education & Research Institutes
• Research Professionals