In recent years, the rise of the global new energy vehicle industry has driven the explosion of lithium battery demand. As the electrolyte solvent of lithium battery, the demand for battery grade DMC (dimethyl carbonate) is expected to usher in long-term and rapid growth.
Due to high separation and purification barriers, although domestic DMC production capacity is rich, few enterprises can provide high-purity battery grade DMC.
Considering the rapid development of new energy industry and the release of polycarbonate production capacity, the total demand for DMC is expected to reach 617,000 tons, 801,000 tons and 1,065,000 tons in 2021-2023 y, with a year-on-year increase of 21%, 30% and 33%, respectively.
In terms of total output, DMC output is expected to be 710,000 tons, 900,000 tons and 1.08 million tons in 2021-2023, with a year-on-year increase of 58%, 26% and 20%, respectively.
In the medium term, industrial grade DMC is in excess supply, and battery grade DMC will be in short supply due to its limited technical barriers.
The raw materials of DMC are commodities, including ethylene oxide, propylene oxide, methanol and syngas. Its downstream demand is mainly electrolyte solvent, polycarbonate, developer, coating, etc.
At present, the phosgene DMC process has been completely eliminated. The total capacity of the transesterification DMC synthesis unit accounts for more than 80% of the total DMC capacity, becoming the mainstream process of DMC production in China.
At the same time, with technological progress, methanol oxidative carbonylation method has also been successfully industrialized. CNSG Anhui Hong Sifang adopts liquid phase method of the process and Chongqing Dongneng New Energy is using gas phase process. Some companies are trying urea production process, but there are still barriers for large-scale production.
The total DMC capacity in China is nearly one million tons per year, and the industrial capacity accounts for more than 80%. On the one hand, the demand for industrial grade DMC dominates the total demand; On the other hand, battery grade DMC requires high purity, usually 99.99% or even more than 99.999%, and the corresponding process requirements are high.
By the middle of 2021, the total capacity of industrial grade and battery grade DMC in China is 790,000 tons per year and 165,000 tons per year, respectively.
There are only four domestic enterprises producing battery grade DMC, including Shida Shenghua, Shandong Haike, Oxiran Chem and CNSG Anhui Hong Sifang. Among them, Shida Shenghua, the leading enterprise, accounts for more than 60% of the current battery grade DMC production capacity.
In addition, the production capacity of battery grade EC (ethylene carbonate) is basically concentrated in a few enterprises such as Shida Shenghua, Dongying Haike, Oxiran Chem, Liaoning Kong Lung, Yingkou Hengyang New Energy Chemical and Zhongke Hongye Chemical. The battery grade EMC (methyl ethyl carbonate) with higher technical difficulty is concentrated in a few enterprises such as Shida Shenghua, Dongying Haike, Liaoning Kong Lung and Liaoyang Best Chemical.
Downstream applications of DMC include lithium battery electrolyte, polycarbonate, developer, adhesive, coating and triphosgene, etc., among which electrolyte solvent and polycarbonate account for 60% of the demand. Industrial grade DMC is used in most application fields such as polycarbonate and developer; Battery grade DMC is used for lithium battery electrolyte, and is used as electrolyte mixed solvent in combination with vinyl carbonate (EC).
The rapid growth of demand has attracted many players. The estimated new capacity in 2021 is 620,000 tons per year. From 2021 to 2025, the new capacity of domestic DMC will be about 1,905,000 tons per year, including about 1.45 million tons of industrial DMC and about 450,000 tons of battery DMC. In the short term, industrial grade DMC will be in surplus, and the battery grade DMC will be in short supply before the end of 2022.
Source: Petrochemical Industry Going Global Alliance