European Dimethyl Carbonate Prices Stabilize Amid Rebounding Market Activity In August 2024

Rotterdam, Netherlands: European Dimethyl Carbonate prices have noted stability in the latter half of August 2024. As the market is reopening, business transactions have sped up while the trading activities are also rebounding as reported by the market participants. Industrial production is also improving as the end of summer holidays brings back the workforce.

However, the demand for Dimethyl Carbonate has remained dampened across Europe. The consumption level of Dimethyl Carbonate has decreased significantly this year due to poor replenishment and more than sufficient inventories.  As per the latest figures from the European Automobile Manufacturers' Association (ACEA), electric car registrations in the European Union dropped by 10.8% in July. A total of 102,705 electric cars were sold, with the market share declining to 12.1%, down from 13.5% in the same month last year.

In Germany, electric vehicle registrations plummeted by 36.8% in July, largely due to the reduction in government financial incentives for EV purchases, making the cars too expensive for many consumers. In contrast, the Netherlands saw an 8.9% increase in EV registrations, while Belgium experienced a significant 44.2% surge. France also saw a modest rise of 1% in electric car registrations. However, these gains in other countries were not sufficient to offset the sharp decline in Germany's performance.

In both Europe and the US, the production of raw materials for lithium-ion batteries, including Dimethyl Carbonate, continues to face challenges due to the early stages of industrial development. To lessen dependence on Chinese supply chains, both regions are introducing policies aimed at enhancing energy security for battery materials, including Dimethyl Carbonate. Additionally, the freight charges have remained elevated, influenced by factors like tighter container availability and port congestion at key Asian hubs. Demand for Dimethyl Carbonate from the downstream lithium-ion battery manufacturing sector remains weak, with an oversupply of materials contributing to sluggish trading activity, despite producers maintaining normal operations.

Additionally, in July, BMW took the lead in the European electric vehicle market for the first time, experiencing a significant increase in demand as other competitors faced challenges. However, data indicates a broader trend of waning interest in electric vehicles across Europe, with EV registrations dropping 6% compared to July 2023. Uncertainty surrounding incentives and the future of EVs continues to deter potential buyers.

On the cost side of Dimethyl Carbonate, upstream Methanol prices in the European market also experienced stability, recently. Factors such as inflation pressures, fluctuations in energy prices, and global market uncertainties contributed to the price volatility. The stability in Methanol prices is expected to ease pressure on Dimethyl Carbonate manufacturers, as Methanol is a key raw material for producing various chemicals including Dimethyl Carbonate.

As per the ChemAnalyst pricing intelligence, the prices of Dimethyl Carbonate are anticipated to demonstrate an upward trend in the upcoming weeks backed by improvement in the demand and reopening of the European markets.