Analysis of the dimethyl carbonate (DMC) industry

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Recently, Hubei Yihua announced its intention to build a plant with an annual production capacity of 300,000 tons of electronic-grade dimethyl carbonate (DMC), using the low-pressure gas-phase oxidation carbonylation process for methanol – which has once again drawn attention from the market to the DMC industry. DMC is a key raw material in areas such as lithium battery electrolytes, polycarbonates, and electronic chemicals; the industry is currently in a critical phase of capacity expansion, structural upgrading, and technological innovation. I. Main production processes and their technical origins: At present, the industrial production of DMC in China relies primarily on the transesterification method and the methanol oxidation carbonylation method; the phosgene method has been largely phased out due to its high toxicity and environmental impact. 1. Transesterification method: This process uses propylene oxide/ethylene oxide, carbon dioxide, and methanol as raw materials to produce ethylene glycol/propane glycol simultaneously; it is a mature process with high safety levels. The transesterification method is the dominant process, accounting for 87.3% of the total domestic capacity. The technology originated in Ube, Japan, and BASF in Germany, and it is now fully domestically produced. The products from this route have a high purity, but additional purification is required to achieve electronic-grade quality, resulting in higher costs. 2. Methanol oxidative carbonylation method: This process uses methanol, CO, and oxygen as raw materials, and proceeds through synthesis under the action of a catalyst; the only by-product is water, resulting in high atom economy and enabling the direct production of high-purity products. The core technology originates from Ube, Japan, and breakthroughs have been achieved in China. By 2026, the share of production capacity accounted for by this process will have risen to 10.2%, an increase of 2.2 percentage points compared to 2025; the energy consumption per ton for newly launched projects will be reduced by 19%, and the purity of the products can reach over 99.99%. The DMC projects of Jiangsu Supor and Hubei Yihua are the methanol vapor carbonylation process. 3. Technological upgrades and green innovation: The industry’s technologies are advancing toward greener and higher-end developments. The Shanghai Research Institute of Petrochemical Technology (SHRI) has developed technologies for the production of ethylene carbonate (EC, a key raw material for DMC) via multiphase catalytic processes, as well as for downstream carbonate derivatives. These technologies have enabled the long-term, stable operation of industrial plants with capacities of tens of thousands of tons, while also being environmentally friendly. In addition, the negative-carbon production pathway of \"green electricity + CO₂ + green hydrogen\" has entered the pilot stage, and the mass-production technology for electronic-grade DMC is becoming increasingly mature; by 2026, domestic production is expected to reach 85,000 tons per year, representing a 21.4% increase compared to 2025. II. Market supply and demand landscape 1. Capacity and production: By the end of 2025, China’s total capacity for dimethyl carbonate would reach 4.025 million tons per year, with production amounting to 1.965 million tons; the industry as a whole was in a state of oversupply, and the pace of capacity expansion had slowed down since 2025. Recently, Fujian Baihong Chemical’s 410,000 tons per year carbonate complex facility (including 100,000 tons of DMC) was successfully commissioned in its first attempt, becoming the largest of its kind in China and further enhancing the supply capacity for high-quality electrolyte solvents. 2. Demand structure: The solvent for lithium battery electrolytes is the main application area for DMC. By 2025, consumption in this sector will reach 870,000 tons. By 2026, consumption in the electrolyte sector is expected to increase further to 1.41 million tons. Polycarbonate represents the second-largest area of application, with consumption amounting to 670,000 tons by 2025. In addition, demand in emerging high-end fields such as semiconductor developing solutions, gasoline additives, and pharmaceutical intermediates is growing rapidly, becoming new drivers of growth for the industry. 3. Price trend: DMC prices will be volatile in 2026. In the first quarter, the reference price in the Shandong market dropped to 3,830–4,100 yuan per ton at one point. Driven up by raw material costs, the market price in Shandong reached 4,330–4,700 yuan per ton in late March. On an annual basis, prices are expected to follow a pattern of stability first, followed by an increase and then a decline, with the average annual price likely to rise by about 5.3% compared to 2025. III. Product Standards and Profit Divergence 1. Product Grading (1) Industrial grade: purity of not less than 99.5%, moisture content ≤0.1%. (2) Battery grade: The purity must be over 99.995%, metal ions should be controlled at around 0.1 ppm, and the moisture content must be below 0.005%, to meet the high safety requirements of lithium batteries. (3) Electronic grade: purity exceeds 99.999%, with the threshold for metal impurities reduced to 1 ppb, meeting the standards of high-end industries such as semiconductors. 2、Divergent profits: The industry as a whole faces profit pressures due to oversupply. The release of new production capacity puts pressure on prices. Due to high technical barriers, electronic-grade DMC continues to command a premium price. With the implementation of these standards, green production capacity that meets them accounts for 92%; outdated production capacity is being phased out at an accelerated pace. Leading enterprises that possess integrated cost advantages and technological leadership enjoy greater resilience in terms of profitability. IV. Major manufacturers, current and planned production capacities 1. Domestic production capacity distribution: The East China region accounts for 53.3% of the total production capacity, with Shandong and Jiangsu being the key production areas ； The Northwest region will see the fastest growth in production capacity, accounting for 16.8% by 2026. Competition among leading companies is fierce. Recent significant developments include: (1) Depu New Materials: a 500,000-ton DMC production project costing 3.8 billion yuan, which utilizes green production technologies and can absorb 300,000 tons of carbon dioxide per year. (2) Jiangsu Supor: Environmental impact assessment for a 200,000-ton/year DMC project; completion is planned for 2029. (3) Fujian Baihong Chemical: Its 410,000 tons per year carbonate production capacity is already in operation, including a 100,000 tons per year DMC unit. (4) Hubei Yihua’s 300,000-ton capacity for electronic-grade DMC. V. Industry development trends: 1. High-end development and technological upgrades: The growing demands for higher material purity in downstream industries such as new energy and semiconductors are driving the advancement of DMC products toward battery-grade and electronic-grade standards. Environmental protection laws drive the innovation of production processes toward newer technologies that are less carbon-intensive and more environmentally friendly. 2. Integration of the industrial chain: Leading companies are integrating key raw materials such as methanol and propylene oxide in the upstream segment, and extending their operations to electrolyte solvents and other carbonate products in the downstream segment, thereby creating an integrated industrial chain. 3. Rebalancing of supply and demand: Following rapid capacity expansion, the industry has recognized the issue of structural overcapacity. Future capacity additions will place greater emphasis on technological advancement and the development of high-end products; the supply-demand imbalance is expected to gradually ease, with the industry moving toward a more balanced and sustainable trajectory