What drives the current supply-demand balance in China's dimethyl ether market?

What drives the current supply-demand balance in China's dimethyl ether market?
China's dimethyl ether market is closely tied to methanol feedstock dynamics and coal chemical integration. Major producers like Lanhua Sci-Tech operate integrated coal-to-methanol-to-DME chains, yet many DME units remain idle or run at low utilization due to weak downstream demand and environmental constraints. Lanhua's two DME plants, with combined capacity of 200,000 tons per year, produced only 17,200 tons in 2022, reflecting severe underutilization. Methanol market reports show persistent weakness in traditional downstream sectors including DME, with MTO units running at low loads and summer being a seasonal demand trough. Meanwhile, methanol supply is expanding from domestic plant restarts and rising Iranian imports, pressuring feedstock costs downward. DME prices often move inversely to methanol margins, and when methanol drops sharply, DME producers can regain profitability, but overall demand growth remains constrained by competition from LPG and limited new applications.