60% price cut in half a year! Is there severe competition in the dimethyl carbonate market?

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60% price cut in half a year! Is there severe competition in the dimethyl carbonate market? Author/Source: Coal Chemical Industry Information Network Date: 2022-05-10 Clicks: 13 After entering the second quarter, the price of dimethyl carbonate (DMC) declined more rapidly. “Around May Day, the price of electronic-grade products in the Shandong market dropped to 5,700 yuan per ton (the same unit is used hereafter), while the price of industrial-grade products fell below 5,000 yuan, representing a 60% decline from the peak levels seen in October last year. Nevertheless, in recent times several companies have announced plans to enter the DMC sector, with planned production capacities exceeding 800,000 tons per year. According to statistics from Huajing Industry Research Institute, by the end of 2021, the national DMC production capacity was 1.256 million tons per year, an increase of 35.6% compared with the previous year. Not only is production capacity increasing, but DMC prices are also on the rise. Among them, the price of electronic-grade DMC reached a peak of 14,000 yuan on October 20 last year, an increase of 108% compared to the beginning of last year. Thanks to the soaring prices of products, several companies that specialize in DMC have made huge profits. Among them, Shandong Sinopec Shenghua Chemical Group Co., Ltd. achieved a net profit attributable to the parent company of 1.178 billion yuan last year, a increase of 353.6% compared with the previous year. There is actually an oversupply of dimethyl carbonate, and with weak demand recently, prices have fallen rapidly, further squeezing profit margins. It is recommended that the industry exercise caution in making investments and approach the ‘benefits’ associated with the development of new energy sources with prudence. ”Bai Guohua, deputy marketing director of Shandong Hualu Hengsheng Chemical Co., Ltd., said. However, an increasing number of companies are beginning to invest in DMC production: At the beginning of 2020, Hualu Hengsheng developed a new process for producing DMC alongside ethylene glycol, as well as new catalytic technologies. By October 2021, it had built a DMC production facility with an annual capacity of 300,000 tons, which has been successfully applied in fields such as lithium batteries. After entering 2022, in addition to the facilities under construction at Shida Shenghua (Quanzhou) Co., Ltd. and Hubei Sanning Chemical Co., Ltd., a number of chemical companies, including Lihua Yiweiyuan Chemical Co., Ltd. and Jiangsu Suopu Chemical Co., Ltd., plan to invest in the construction of DMC projects. Among them, a subsidiary of Jiangsu Supor plans to invest 2.181 billion yuan to build a DMC production facility with an annual capacity of 200,000 tons, while Shaanxi Coal Group Yulin Chemical Yuguang High-Tech Materials Co., Ltd. plans to invest 4.62 billion yuan to construct a DMC facility with an annual capacity of 500,000 tons in two phases. However, recent pandemic control measures have affected the supply chain, leading to a decline in production rates among new energy vehicle manufacturers in cities such as Shanghai, which in turn has reduced the demand for electrolytes. Driven by the imbalance between supply and demand, DMC prices have continued to fall, dropping by 44% compared to the prices before the festival. As a result, the profits of DMC companies also declined significantly. It is understood that there are three main production processes for DMC. With current high prices for coal and chemical raw materials, while the prices of DMC and ethylene glycol continue to decline, the propylene oxide (PO) transesterification method (which produces propylene glycol as a by-product) is still profitable; the methanol gas-phase carbonylation and methanol liquid-phase transesterification methods are at break-even; whereas the ethylene oxide (EO) transesterification method (which produces ethylene glycol as a by-product) is now unprofitable. The price of DMC has dropped rapidly, leaving little profit, while the prices of products such as ethyl methyl carbonate (EMC) and diethyl carbonate (DEC) remain above 10,000 yuan per unit; therefore, DMC manufacturers are also exploring ways to extend their industrial chains and diversify their product portfolio. On April 20, Satellite Chemical Co., Ltd. announced that construction has begun on its battery-grade carbonate production facility. The capacity of the first phase of this facility is 150,000 tons per year, covering products such as DMC, EMC, and DEC. Trial production is scheduled to start in the fourth quarter of 2022, in order to supply high-quality and comprehensive electrolyte solvent products to downstream industries. Companies such as Hualu Hengsheng and Shida Shenghua are also continuously expanding their range of solvent products, aiming to become one-stop suppliers of raw materials. After successfully topping the DMC production rankings, Hualu Hengsheng developed DEC and EMC products at the beginning of 2022; it is currently launching high-end solvent projects to further expand and improve its carbonate product portfolio. Shida Shenghua is advancing into the broader field of new energy battery components. Recently, Shida Shenghua has issued several announcements stating its intention to leverage its strengths in carbonate solvents to expand its operations by launching a 300,000-ton/year electrolyte production project, further developing lithium battery materials-related projects, and setting up a 50,000-ton/year production facility for wet electronic chemicals. Through the continuous implementation of the above projects, Shida Shenghua will transform from a one-stop electrolyte material supplier into a comprehensive service provider for electrolytes and materials. Recent developments in DMC projects: Jiangsu Supor plans to build a plant for producing 200,000 tons of dimethyl carbonate. On April 7th, with the aim of expanding its product range and developing the new materials industry, Jiangsu Supor Chemical Co., Ltd. approved a resolution regarding its wholly-owned subsidiary’s plan to invest in a project for manufacturing dimethyl carbonate. The company agreed that its subsidiary, Jiangsu Supor Polyester Technology Co., Ltd., should invest around 2.181 billion yuan in building a plant capable of producing 200,000 tons of dimethyl carbonate per year. Basic Information on the Investment Project
Project Name: Project for Annual Production of 200,000 Tons of Dimethyl Carbonate (provisional name)
Project Location: No. 88, Liangshan Road, Zhenjiang New Area
Project Scope: A facility for annual production of 200,000 tons of dimethyl carbonate, along with associated infrastructure; this includes annual production of 100,000 tons of industrial-grade dimethyl carbonate and 100,000 tons of electronic-grade dimethyl carbonate.
Project Construction Period: Approximately 30 months.
Total Investment: The total investment required for this project is estimated to be 2.181 billion RMB.
Shaanxi Coal Group’s new chemical projects are advancing rapidly, with construction set to begin within this year. In March, a review meeting for the feasibility study of Shaanxi Coal Group Yulin Chemical Co., Ltd.’s project for annual production of 500,000 tons of DMC was held in Xi’an. The 500,000 tons per year DMC project is the first battery electrolyte solvent project that the company is developing based on its existing industrial infrastructure, and construction will begin within this year. Shaanxi Coal Yulin Chemical Company is building an 1.8 million-ton coal-to-ethylene glycol plant. Companies such as Hualu Hengsheng, Zhongyan Hongsi Fang, and Qianxi Chemical have all established DMC projects by leveraging their ethylene glycol production facilities. Project Overview 1. Project Name: Demonstration Project for the Utilization of Coal at Different Quality Levels to Produce New Chemical Materials – 500,000 tons/year DMC Facility ； 2. Location of construction: West of Huiyuan Avenue and South of Keji Road, Qingshui Industrial Park, Yushen Industrial Zone, Yulin City, Shaanxi Province ； 3. Total project investment: 4.623 billion yuan. 4. Land area occupied by the project: approximately 401 mu. 5. Construction contents: Construction of a 500,000-ton/year dimethyl carbonate (DMC) production facility along with auxiliary facilities (with Phase 1 involving the construction of a 100,000-ton/year high-purity DMC production facility). Name and contact information of the project owner: Name: Shaanxi Coal Group Yulin Chemical Yuguangxin Materials Co., Ltd. Address: Qingshui Industrial Park, Yushen Industrial Zone, Yulin City, Shaanxi Province. For contact details, follow the official account and reply with 【Shaanxi Coal】 to view them. Weiyuan Shares signed a technology licensing agreement for 20,000 tons per year of high-purity dimethyl carbonate. Weiyuan Shares issued a announcement on the evening of February 28th, stating that the company has signed a ‘Technology Licensing Agreement for 20,000 tons per year of high-purity dimethyl carbonate’ with Japanese company Ubiquitous Corporation; Ubiquitous will license its technology for producing high-purity dimethyl carbonate to the company, enabling it to manufacture HPDMC. The announcement states that HPDMC is primarily used in lithium battery electrolytes. As one of the four key materials in lithium batteries, electrolytes are mainly applied in three fields: new energy vehicles, 3C electronics, and energy storage. The company stated that if the agreement is fulfilled, it will increase the production of high-purity dimethyl carbonate, thereby further diversifying its product portfolio; this represents an important step forward for the company in the field of lithium battery electrolytes. The high-end solvent project of Hualu Hengsheng has commenced construction. Project name: High-End Solvent Project. Location: No. 24, Tianqu West Road, Decheng District, Dezhou City, Shandong Province, within the existing factory complex of Shandong Hualu Hengsheng Chemical Co., Ltd. Construction content: Using dimethyl oxalate as raw material, construct a 600,000-ton/year dimethyl carbonate plant ； Using dimethyl carbonate and ethanol as raw materials, a 300,000-ton/year ethyl methyl carbonate plant will be constructed, with 50,000 tons/year of diethyl carbonate produced as a by-product; corresponding utility systems, auxiliary facilities, and safety and environmental protection facilities will also be provided. Upon completion and commissioning, it will produce 300,000 tons of dimethyl carbonate and 300,000 tons of methyl ethyl carbonate per year, with 50,000 tons of diethyl carbonate generated as a by-product annually. With a total investment of 11.56 billion yuan, Henan Energy signs a strategic cooperation agreement. On February 9th, the Henan Energy and Chemical Group in Puyang City signed such an agreement; the estimated total investment for the collaborative projects planned in the near future is 11.56 billion yuan. Under the Strategic Cooperation Agreement, the joint projects between the two parties in the near future are as follows: the 300,000-ton methacrylate (MMA) project, which will be constructed in three phases with an estimated investment of 4.73 billion yuan. Phase 1 will have an annual production capacity of 50,000 tons, requiring an investment of 1.15 billion yuan ； The 100,000 tons/year L-lactic acid and 60,000 tons/year PLA projects require an estimated investment of 2.5 billion yuan ； The project for 500,000 tons per year of hydrogen peroxide (50%) and 300,000 tons per year of propylene oxide (using the HPPO method) has an estimated investment of 3.76 billion yuan ； 100,000 tons per year dimethyl carbonate (DMC) project, with an estimated investment of 450 million yuan ； The 300,000 tons/year liquid CO2 recovery project has an estimated investment of 120 million yuan.