European dimethyl carbonate prices stabilized in August amid a rebound in market activity, and may rise in September

In the second half of August 2024, European dimethyl carbonate prices stabilized. As the market reopened, business transactions accelerated, and market participants reported that trading activities were also rebounding. With the end of the summer vacation and the return of the workforce, industrial production is also improving.

However, demand for dimethyl carbonate in the European market remains sluggish, and dimethyl carbonate consumption has fallen sharply this year due to insufficient replenishment and excess inventory. The latest data from the European Automobile Manufacturers Association (ACEA) showed that EU electric vehicle registrations fell 10.8% in July, with a total of 102,705 electric vehicles sold, and the market share fell from 13.5% in the same period last year to 12.1%.

In Germany, electric vehicle registrations plummeted 36.8% in July, mainly due to the government's reduction of financial incentives for purchasing electric vehicles, making electric vehicles too expensive for many consumers. In contrast, electric vehicle registrations in the Netherlands increased by 8.9%, while electric vehicle registrations in Belgium increased significantly by 44.2%. Electric vehicle registrations in France also increased slightly by 1%. However, these gains in other countries were not enough to offset the sharp decline in Germany's performance. Data showed that interest in electric vehicles is waning across Europe, with electric vehicle registrations falling 6% compared to July 2023. Incentives and uncertainty about the future of electric vehicles continue to hinder potential buyers.

In addition, in July, BMW took the lead in the European electric vehicle market for the first time, with its demand growing sharply at a time when other competitors are facing challenges.

In Europe and the United States, the production of raw materials for lithium-ion batteries, including dimethyl carbonate, remains challenging as industrial development is still in its early stages. In order to reduce dependence on the Chinese supply chain, both regions are introducing policies aimed at strengthening energy security for battery materials, including dimethyl carbonate. In addition, freight rates remain high due to factors such as tight container supply and congestion at major hub ports in Asia. Demand for dimethyl carbonate in the downstream lithium-ion battery manufacturing industry remains weak, and although producers remain in normal operations, oversupply of materials has led to sluggish trading activity.

In terms of the cost of dimethyl carbonate, upstream methanol prices in the European market have also remained stable recently. Factors such as inflationary pressures, energy price fluctuations and global market uncertainties have led to price fluctuations. The stabilization of methanol prices is expected to ease the pressure on dimethyl carbonate manufacturers as methanol is a key raw material for the production of various chemicals including dimethyl carbonate.

According to ChemAnalyst Price Intelligence, dimethyl carbonate prices are expected to show an upward trend in the coming weeks of September due to improved demand and the reopening of the European market.