The Di-methyl Ether Market Continues to Grow Owing To Its Increased Demand and Usage in Various Industrial Sectors as a Replacement of Diesel, LPG, and an Aerosol Propellant

 

Dimethyl ether (DME) is an artificially produced alternative to diesel. It is used in compression ignition diesel engines which are specially designed to support DME. Under the normal atmospheric condition, DME is a colorless gas and is used extensively as an aerosol propellant and also in the chemical industry.

DME can be generated from coal, biomass, or natural gas. It does not produce any ash when burnt. When DME is exposed to moderate pressure it transforms to liquid. Liquidation makes it easier to store and transport. Owing to the chemical and physical properties and the excellent storage efficiency the usage and demand of DME are increasing in the fields of automobile engines, household, and power generation.

Market Dynamics

The major driving factor influencing growth of the dimethyl ether market is its wide application in manufacturing industries producing coatings and paints, transportation fuel, and household fuel. Increased demand for replacing aerosol propellant, diesel, power generation, and LPG is also driving the dimethyl ether market. Regions that lack LPG accessibility are opting for an alternative. The unavailability of LPG is a major concern as these regions have fewer gas reserves and hence have very limited choices when it comes to replacing LPG. This scarcity and demand for a replacement is the main driving factor behind the dimethyl ether market.

The demand for the dimethyl ether as a fuel for gas turbines is also expected to fuel the market growth. For instance, according to the International Energy Agency, transport biofuel production expanded 6% year-on-year in 2019. It also has extensive use in the global paint and coating market as an aerosol propellant, which is used to spray the vapor state coatings or paints from a pressurized container.  However, the production of dimethyl ether needs mass capital investment, which is acting as a restraining factor hindering growth of the market. Rules and regulations implicated by regional governmental bodies are also proving to be a major challenge for market growth.

This market is distributed in five regions that include North America, Europe, Asia-Pacific, Middle East, and Africa, and Latin America. Among these, Asia Pacific is estimated to hold a major share of the market owing to the prevalence of key players in this region. China is a major producer and consumer of dimethyl ether, owing to the increasing demand from the transportation and power generation industries in the country. According to a report by Methanol Institute, China’s Reform Commission and National Development was planning to produce 20 million tons of DME by 2020.  The demand from the transport sector is expected to drive growth of the market in North America, while the automotive industries drive the market growth in Europe.

Competitive Analysis

Major players operating in the global dimethyl ether market include, China Energy Limited, Akzo Nobel N.V., Mitsubishi Corporation, The Chemours Company, Ferrostaal GmbH, Royal Dutch Shell plc, Zagros Petrochemical Company, Jiutai Energy Group, and Oberon Fuels.

In 2019, Mitsubishi Corporation announced that it will be expanding its business and setting up new methanol plants in Trinidad and Tobago.