DMC will add new capacity in the future-industrial-grade surplus, battery-grade shortage

In recent years, the rise of the global new energy automobile industry has driven the explosion of demand for lithium batteries. As a lithium battery electrolyte solvent, the demand for battery-grade DMC (dimethyl carbonate) is expected to usher in long-term rapid growth. However, due to the extremely high barriers to separation and purification, the current domestic DMC production capacity Although there are wealthy companies, few companies can provide high-purity battery-grade DMC.

Demand side: Taking into account the rapid development of the new energy industry and the release of Polycarbonate production capacity, it is estimated that the total demand for DMC in 21-23 is expected to reach 61,7, 80,1 and 1.065 million tons, a year-on-year increase of 21%, 30%, and 33%, respectively. Looking at the oversupply of industrial-grade DMC, battery-grade DMC will be in short supply due to its limited technical barriers.

On the supply side: a large number of production capacity investment + process diversification, the pattern is expected to undergo a major change.

From the perspective of total volume, the output of DMC in 21-23 is expected to be 71, 900, and 1.08 million tons, respectively, with a year-on-year increase of 58%, 26% and 20%.

Introduction to Dimethyl Carbonate

Dimethyl carbonate, DMC for short, is a chemical raw material with low toxicity, excellent environmental performance, and a wide range of uses. It is an important organic synthesis intermediate. From the perspective of the industrial chain, the upstream raw materials of DMC are bulk commodities, including ethylene oxide, propylene oxide, methanol and synthesis gas, and its downstream demand is mainly electrolyte solvents, polycarbonate, developer, paint, etc.

PO/EO transesterification and methanol oxidative carbonylation are the mainstream preparation processes for DMC

With the development of dimethyl carbonate, the process is gradually updated, from the initial hydration method and transesterification method to the latest methanol oxidative carbonylation method.

At present, the phosgene DMC process has been completely eliminated, and the total capacity of the transesterification synthesis DMC device accounts for more than 80% of the total DMC production capacity, which has become the mainstream process of DMC production in my country. At the same time, with technological progress, the methanol oxidative carbonylation method has also been successfully industrialized. China National Salt Anhui Hongsifang is the liquid phase method of this process and the gas phase method of Chongqing Dongneng New Energy. Some enterprises are trying the urea production process, but there are still resistances to large-scale production.

Production capacity is nearly one million tons, mainly industrial grade

The national DMC production capacity is nearly one million tons, and the industrial-grade production capacity accounts for over 80%. On the one hand, industrial-grade DMC demand occupies the dominant position in total demand; on the other hand, battery-grade DMC requires high purity, usually requiring a purity of 99.99% or even more than 99.999%. The corresponding process requirements are relatively high, and its high threshold is also As a result, major companies in the industry mainly produce industrial-grade DMC, and only a few companies produce battery-grade DMC. As of mid-2021, my country's total industrial-grade and battery-grade DMC production capacity will be 790,000 tons and 165,000 tons, respectively.

There are only four domestic companies that master the battery-level DMC process, namely Shida Shenghua, Shandong Haike, Aoke Shares and Anhui Zhongyan Red Sifang, among which the leading company Shi Dashenghua accounts for more than 60% of the current battery-level DMC production capacity. In addition, the production capacity of battery-grade EC (ethylene carbonate) is basically concentrated in a few companies such as Shida Shenghua, Dongying Haike, Aoke Chemical, Liaoning Ganglong, Yingkou Hengyang, Zhongke Hongye, and more technically difficult batteries. Grade EMC (ethyl methyl carbonate) is concentrated in a few companies such as Shida Shenghua, Dongying Haike, Liaoning Ganglong, Liaoyang Beststar and so on. Compared with industrial grade solvents, the structure is very good.

The rapid development of new energy and polycarbonate drives downstream demand

The downstream applications of DMC include Lithium battery electrolyte, polycarbonate, developer, adhesive, coating and triphosgene, among which electrolyte solvent and synthetic polycarbonate account for 60% of the demand. Industrial-grade DMC is used in most application areas such as polycarbonate and developer; battery-grade DMC is used in lithium battery electrolyte, and is used as a mixed solvent of electrolyte with ethylene carbonate (EC). In the next three years, taking into account the rapid development of the new energy automobile industry and the release of polycarbonate production capacity, we expect that the demand for electrolyte and PC (propylene carbonate) for DMC will continue to increase, and the total demand for DMC in 21-23 is expected to reach 62, 80, and 1.065 million tons, the year-on-year growth rate of demand was 34.7%, 30%, and 33.0%.

In terms of future new capacity: industrial-grade surplus battery-grade is still in short supply

The rapid growth in demand has attracted many players to increase the DMC track, and the estimated new capacity in 2021 will be 620,000 tons. From 2021 to 2025, the new domestic DMC capacity will be about 1.905 million tons, of which the industrial-grade DMC capacity will be about 1.45 million tons, and the battery-grade capacity will be only about 450,000 tons. DMC production capacity, production route: oxalic acid dehydroxylation method, shortcomings: coal chemical route products have more impurities. Battery-level supply is still dominated by the higher-cost EO transesterification method, and it is still concentrated in the hands of leading companies such as Shi Dashenghua. For other industrial-grade DMC companies, the purity has not yet reached three nines. In the short term, there is a surplus from the industrial level, and the supply of battery-level DMC is in short supply before the end of 2022.

The demand for battery-level DMC is increasing day by day, and the product technical requirements are high. The current mainstream electrolyte solvent is battery-grade DMC, with high product purity requirements, greater process difficulty, long customer verification cycles, and high technical barriers. From the perspective of the process route, the industrial grade DMC that can be separated from the DMC-methanol azeotrope has a purity of 99.5% and contains a small amount of water, low-carbon chain fatty alcohols and low-carbon chain hydrocarbons and other impurities. It needs to be further purified and used. Its purity reaches more than 99.95% of battery-grade, and even reaches 99.99% of high-purity grade, to meet the requirements of lithium-ion battery electrolyte. In addition, if the control of impurities and moisture is unstable, it will affect the quality of the electrolyte. Therefore, customers have extremely high requirements for the consistency of product purity and trace impurities. Solvent manufacturers need to perform multiple distillations and purifications. In addition, the production of solvents such as EMC and DEC (diethyl carbonate) is the same. Therefore, solvents such as battery-grade DMC have higher technical barriers, and the price is higher than that of industrial-grade DMC.