Wide Acceptance of DME-blended LPG to Increase Demand for Dimethyl Ether

The global dimethyl ether (DME) market is moderately consolidated with a few large players holding a significant market share. A number of key companies operating in the DME market are based in China and these companies collectively account for a massive 85% of the global market, Transparency Market Research says in a new study. Some of these companies are Jiutai Energy Group, Shenhua Ningxia Coal Industry Group Co. Ltd., and China Energy Ltd. These Chinese companies have low operational costs and high installed capacities, which gives them a massive competitive edge. 

Small players pose a negligible threat to the established players. This is because established players have achieved economies of scale and are able to produce DME at low cost. The competition has increased among manufacturers owing to the shutdown by the government on the illegal blending of DME in domestic LPG in China. The degree of competition is likely to be high in the next five years, observes TMR.

High Demand from Asia Pacific Drives Demand for DME-blended LPG

The demand for dimethyl ether-blended LPG is extremely high, especially in Asia Pacific and more specifically from countries such as China, Indonesia, and Japan. Among these countries, China accounts for 80% of the demand for DME, for LPG blending. The similarity of DME and LPG have led to a wide acceptance of DME-blended LPG and is thus replacing traditional LPG. This is benefitting the DME market.

Another factor driving the DME demand is its use as an aerosol propellant. Conventional aerosol propellants are being increasingly replaced by the environmental-friendly DME-based aerosol propellants. DME-based aerosol propellants are extensively used in room fresheners, deodorants, hair sprays, antiperspirants, and pain relieving sprays. Thus, the demand for DME is driven by its extensive use in the cosmetic industry and other end use products.

Ban Imposed by Chinese Government On Domestic Use of DME-blended LPG Reduces DME Demand

The most lucrative application of DME is DME-blended LPG. The demand for DME-blended LPG in China is the highest and thus, the shutdown on the illegal blending of DME in LPG cylinders has resulted in the restricted growth of the DME market. Although the blending of DME in LPG cylinders still prevails in China, albeit illegally, the demand for DME has been subdued since the Chinese government imposed a ban on DME-blended LPG for domestic use.

Another application area of DME is its use as an alternative to diesel, owing to its low emissions of harmful gases and smoke-free combustion. However, the poor lubricating properties and low viscosity of DME cause deterioration of the fuel injection systems. Leakage occurring from fuel supply systems as a result of low viscosity, renders DEM unviable as a standalone fuel.

Bio-based DME to Emerge as Transportation Fuel in Bid to Reduce Carbon Emissions

Dimethyl ether is derived from fossil fuel such as coal and biomass. The DME obtained from fossil fuel has a higher carbon footprint and releases much carbon dioxide. Thus, Europe, North America, and many countries in Asia have shifted focus to bio-based DME in a bid to reduce carbon emissions.

Moreover, the government in China has imposed strict restrictions on the production of coal, in order to control environmental pollution. This is causing companies in China to invest heavily on cleaner technologies such as bio-based DME. Thus, bio-based DME is expected to become one of the mainstream fuels and open many opportunities of growth in the market.

China to Lead Dimethyl Ether Market by Volume

China accounted for the largest share of 80.4% in the global dimethyl ether market in 2013. Moreover, the market in China is expected to exhibit the highest growth in terms of volume. The DME market in Europe and North America are also expected to witness growth at a fast pace.

On the basis of raw materials used in the manufacturing of DME, fossil fuel accounted for 96.5% of the global market in 2013, while bio-based DME accounted for the remaining 3.5% of the market.

According to the report, the global opportunity in the DME market will rise from US$4.46 bn in 2013 to US$8.37 bn by 2020, expanding at a 9.4% CAGR from 2014 to 2020, as per TMR.

This information is based on the findings of a report published by Transparency Market Research titled “Dimethyl Ether Market - Global and China Industry Analysis, Size, Share, Growth, Trends and Forecast, 2014 - 2020.”

The report segments the global dimethyl ether market as follows:


  • LPG blending
  • Aerosol propellants
  • Transportation fuel
  • Industrial
  • Others (Including chemical feedstock, etc.)

Raw Material

  • Fossil fuel based DME
  • Bio based DME


  • North America
  • Europe
  • Asia Pacific
    • China
    • Rest of Asia Pacific
  • Rest of the World

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