Over the recent years, there has been a considerable growth in the automotive industry owing to rising sales automobiles in the developing nations. This is directly impacting the sales of dimethyl ether which serve as an additive with the fuel used by automobiles. Dimethyl ether which is also known as methoxymethane, is a natural compound with the chemical equation CH3OCH3. It is basically produced by converting hydrocarbons to synthesis gas through gasification process. Synthesis gas, is converted to methanol while using copper-based catalyst, with subsequent dehydration of methanol, thus producing the ether.
On the basis of raw materials, the dimethyl ether market is categorized into methanol, coal, natural gas, and bio-based. During the historical period, methanol accounted for significant share in the dimethyl ether market. The high demand for methanol reflects the ease with which the ether can be produced using methanol as a raw material. Moreover, the production of ether from methanol is a highly cost-effective compared to using other types of raw materials.
Based on application, the dimethyl ether market is categorized into LPG blending, aerosol propellant, transportation fuel, power plant fuel, chemical feedstock, and others. Presently, LPG blending accounted for highest share in the dimethyl ether market. Ether produced using dimethyl is an affordable source of fuel, which is widely used in meeting the energy requirements in remote areas without investing large amount of capital.
With the declining reserves of crude oil and types of fuel sources, ether produced through dimethyl can serve as an effective additive to enhance the production of these fuel sources. Due to rapidly growing demand for energy, a large amount of capital is being invested in crude oil recovery. The rising need for ether for enhanced oil recovery and drilling and fracturing process will have positive impact on the dimethyl ether market.
The major growth drivers identified in the dimethyl ether market is the rising demand for the compound from automotive industry. Growing preference of consumers coupled with emerging environmental concerns have resulted in increased demand for less polluting and enhanced quality fuel in automobile industry. The rising consumption of ether is resulting in rapid transformation of automobile market. For instance, car manufacturers are replacing diesel, petrol, and LPG with ether owing to its property of being a cleaner fuel. The rising need for a clean fueled by automobile industry would ensure the growth of dimethyl ether marker during the forecast period.
Inadequacy in the supply chain to meet the demand is serving as the major restraint. The distribution of ether requires considerable infrastructural investment, particularly, in developing the distribution network. Due to the absence of inadequate distribution network, ethers developed using dimethyl remains unavailable for large number of users which prohibits the growth of dimethyl ether market.
Growing demand for clean fuel from emerging economies are expected to offer growth opportunities for dimethyl ether market. Countries such as China, and India have emerged as one of the prominent automotive markets in the world. However, this has also resulted in high level of vehicular pollution in major cities of these countries. As a result, these countries are shifting towards cleaner source of fuel which offers ample for the growth of dimethyl ether market in emerging countries.
Insights by geography
APAC dimethyl ether market is expected to remain the largest regional market during the forecast period. This is attributed to the increasing demand for clean fuel from the transportation, and oil and gas industries in the region. The persistent issue of high environmental pollution, faster rate of oil depletion, and growing greenhouse gases concern in the region are the major factors driving the market growth.
Some of the major players operating in the global dimethyl ether market are Akzo Nobel N.V., Shell International B.V., The Chemours Company, China Energy limited, Mitsubishi Corporation, Ferrostaal GmbH, Grillo-Werke AG, Jiutai Group, Oberon Fuels, and Zagros Petrochemical Company.