Dimethyl Ether Sector Develops Rapidly


By Zong Yangong

Rapid capacity expansion

Dimethyl ether production in China has developed rapidly in
recent years. The total capacity of dimethyl ether in China was
only 31.8 thousand t/a in 2002, the output was around 20 thousand
tons and the operating rate was 63%. The number of producers
increased to over 30 in 2006. Total capacity was more than 480
thousand t/a, output reached 320 thousand tons and the operating
rate was around 67%. The average annual growth of capacity and
output was 97% and 96% respectively.
   Quite a few companies in China plan to construct large
dimethyl ether production units by using domestic technologies
or through joint ventures with foreign companies. If all the
planned projects are completed on schedule, the capacity of
dimethyl ether in China will reach more than 10 million t/a in
2010.

Bright prospect in downstream application and need of cautious
attitude in fuel substitution

In industrial sectors dimethyl ether is used mainly as an aerosol
propellant, a refrigerant or a foaming agent. It is also used
as chemical intermediate in the synthesis of chemical products
with high added value such as dimethyl sulfate, dimethyl sulfide,
dimethyl carbonate and polycarbonates. With the price rise of
crude oil in recent years, the use of dimethyl ether as a
substitute fuel has become a market focus.

   (1) Industrial sectors

Aerosol products (such as spray insecticides, styling gels, air
scenting agents, spray coatings and adhesives) used great
quantities of fluorochlorohydrocarbons as propellants in the
past. With the overall prohibition to the production and use of
fluorochlorohydrocarbon, dimethyl ether has gradually replaced
fluorochlorohydrocarbon and propane (butane) gas due to its
features of easy volatility, no toxicity, no carcinogenicity and
good water/alcohol solubility and become the fourth-generation
propellant for the aerosol sector. The consumption of dimethyl
ether in aerosol products is quite large in the United States
and Europe and around 25% of aerosol products use dimethyl ether
as the propellant.
   Dimethyl ether used as a refrigerant (adding a certain amount
of other assistants) has the advantages of low pollution and good
refrigerating effectiveness. The consumption of dimethyl ether
in this sector will increase with technical advances.
   The use of dimethyl ether as foaming agent for polystyrene,
polyurethane and thermoplastic polyester foam has already been
developed in foreign countries. Foamed products have even pore
size, great flexibility and improved pressure resistance. China
however does not begin research in this area.
   The consumption of dimethyl ether in industrial sectors such
as aerosols in China was around 30 thousand tons in 2005 and
around 32 thousand tons in 2006. The demand is expected to be
more than 40 thousand tons in 2010 with an average annual growth
of 6%.

    (2) Domestic fuel

Domestic fuels used in large and medium cities in China are still
mainly natural gas, coal gas and LPG (liquefied petroleum gas).
Dimethyl ether is similar to LPG in property. Liquefied dimethyl
ether has many advantages as a domestic fuel. As dimethyl ether
contains oxygen, it burns completely with no residual liquid,
and the tail gas conforms to the national environmental standard.
As the pressure of liquefied dimethyl ether can meet the
requirements of LPG at normal temperature, it can be stored in
LPG cylinders, share cookers with LPG and is safer than LPG in
storage, transportation and use. Besides, dimethyl ether can be
blended with coal gas at any ratio to improve combustion
properties and increase the heat value of coal gas.
   Dimethyl ether can also be used in alcohol/ether fuel (mixed
fuel composed of dimethyl ether, methanol and other components).
Compared with alcohol-based fuel, alcohol/ether fuel has
advantages. Alcohol-based fuel has a relatively low steam
pressure and therefore needs preheating before use.
Alcohol/ether fuel has no such defect. In addition,
alcohol/ether fuel has higher heat value, moderate price and
convenient application dissemination. It was therefore included
in the major research achievement projects for dissemination
during the Ninth Five-year Plan period (1996 - 2000).
Alcohol/ether fuel is however not as good as liquefied dimethyl
ether in safety and convenience.
   The output of LPG in China was 17.453 million tons in 2006,
an increase of 8.3% over 2005. The imported quantity (including
liquefied propane and liquefied butane) was 5.36 million tons,
while 152 thousand tons (including liquefied propane and
liquefied butane) were exported, and the apparent consumption
was 22.661 million tons.
   Dimethyl ether production in China today is in small scale,
low output and high cost. The amount used to replace LPG is
therefore not very big. The consumption of dimethyl ether to
replace LPG was around 170 thousand tons in 2005 and around 280
thousand tons in 2006. If dimethyl ether were used to replace
10% of imported LPG providing the price is suitable, the
consumption of dimethyl ether would reach 1.77 million tons in
2010. The use of dimethyl ether as a domestic fuel to replace
LPG therefore has a bright market prospect.

    (3) Substitute fuel for diesel engines

As dimethyl ether has relatively high cetane number and high
oxygen content, it has better combustion properties and can
achieve smokeless burning. It is therefore an ideal fuel for
diesel engines. When dimethyl ether is used as fuel, the tail
gas needs no catalytic conversion, the emission of nitrogen
oxides and black smoke can meet the requirements for automobile
tail gas emission and engine noise can also be reduced.
   In the use of dimethyl ether for diesel substitution, the
European Union, Japan, Shanghai Jiaotong University and Xi'an
Jiaotong University have all developed dimethyl ether-fired
vehicles. Shanghai and Linyi of shandong province are organizing
the trial use of dimethyl ether vehicles today. Shanghai plans
to construct the first dimethyl ether-fired passenger bus fleet
at the end of 2007 and scale up to over one thousand dimethyl
ether-fired passenger buses before the World Expo. The first
dimethyl ether-fired passenger bus developed by Shanghai
Jiaotong University already gained approval of the state.
   The consumption of dimethyl ether as a substitute fuel will
be determined by its economics. Substitution can be achieved
only when the price/property ratio of dimethyl ether is better
than diesel or LPG.
   1.8 tons of dimethyl ether can replace 1 ton of diesel on
average. Based on a market price of RMB3 800 per ton (at the end
of 2006), the price for 1.8 tons of dimethyl ether is RMB6 840,
being RMB2 040 higher than RMB4 800 for 1 ton of diesel. Only
when the production cost of dimethyl ether is controlled at
around RMB2 300 per ton can it find massive application and a
dramatic increase in consumption.
   The capacity expansion of dimethyl ether to more than 10
million t/a in 2010 takes its use as domestic fuel and the use
as engine fuel as target markets. These two markets are however
only in an early stage of development today. If these two markets
are still not well developed late at that time, dimethyl eth