Mid-August has arrived, with extreme high temperatures prevailing across the whole country. Chemical industrial hubs in East China, North China, Central China, South China and other regions have officially entered the annual summer demand off-season. Persistent intense heat has intensified the pressure of workplace safety management for chemical enterprises, with equipment under constant high heat dissipation loads. Most factories have adopted staggered production and rotating shutdown schedules for equipment maintenance. Meanwhile, overall vitality of the end consumer market remains sluggish: demand for private car tire replacement has declined, production and sales of daily rubber products have slowed, and order volumes for architectural coatings have decreased. In the same period of previous years, the silica market was easily dragged down by shrinking downstream purchases, leading to a weak overall market and gradually softening transaction prices. However, the industrial landscape has shifted noticeably in 2026. Bolstered by solid upstream raw material costs, coordinated output curbs and price stabilization policies implemented by major domestic silica manufacturers, coupled with long-term steady rigid procurement demand from emerging sectors including new energy vehicles, photovoltaic encapsulation, lithium battery manufacturing and precision electronic components, the overall silica market has broken away from the earlier weak volatile trend and posted a mild steady uptick. Product differentiation has become increasingly prominent: low-end filler-grade silica features balanced supply and demand with negligible annual price fluctuations; high-end functional silica characterized by high dispersibility, low volatility, hydrophobicity and temperature resistance suffers tight spot supply with consistently firm factory quotations. According to full-day monitoring data released by domestic silicone big data platforms and bulk commodity information institutions on August 12, the comprehensive benchmark quotation for domestic silica closed at 6,000 CNY per ton on the day, a slight increase from the previous day and a cumulative rise of over 1% compared with early August. The minor correction in late July has been fully reversed, and the market bottom has been continuously consolidated. Trends vary sharply across product segments: precipitated silica recovers slowly only on sporadic rigid replenishment orders from downstream buyers with mild and restrained growth momentum; high-purity fumed silica has long stayed firmly at high levels with minimal annual price swings. The stark contrast in spot availability vividly reflects the bipolar cold and hot conditions of the market.
In terms of overall market supply, the average operating rate of domestic silica production facilities has steadily remained between 62% and 65%, markedly lower than the full-capacity output during spring and autumn peak sales seasons. The industry is clearly determined to curb capacity release and resolve the long-standing chronic problem of overcapacity. The prolonged sweltering heat creates multiple obstacles to continuous chemical production, raising equipment failure risks and potential safety hazards. Local emergency management authorities have carried out special summer workplace safety inspections alongside routine environmental supervision. Within the five core production regions of Shandong, Jiangsu, Jiangxi, Hubei and Hunan, numerous small and medium-sized processing plants have voluntarily reduced production loads. Some aging, high-energy-consumption production lines with outdated environmental supporting facilities have been suspended for maintenance. The total volume of silica circulating on the market has declined steadily, effectively alleviating the long-standing imbalance between supply and demand. Meanwhile, several leading large-scale domestic silica enterprises have reached a consensus within the industry, completely abandoning the extensive competitive model of seizing market share through predatory low-price dumping. Production and delivery are strictly arranged in accordance with actual order volumes from downstream clients to flexibly regulate shipment pace, with no arbitrary price cuts or dumping solely to boost sales performance. At present, overall industrial social inventory has fallen to an annual low level. The inventory turnover cycle of conventional silica for ordinary rubber reinforcement and plastic fillers is merely around one week, indicating a rough balance between supply and demand. In contrast, there is a substantial spot shortage of high-dispersion precipitated silica and hydrophobically modified fumed silica applied to low rolling-resistance safety tires for new energy vehicles, silicone rubber for photovoltaic module sealing, lithium battery separator coatings, and waterproof insulation encapsulation of electronic parts. Orders at many leading manufacturers have been scheduled all the way to early September, and the tight supply situation cannot be effectively alleviated in the short term.
Sustained firm upward prices of upstream raw materials have built a solid cost barrier for silica, which serves as the core driving force behind the market’s rebound from decline. Three fundamental raw materials indispensable for precipitated silica production — water glass, industrial silicon and concentrated sulfuric acid — have maintained a strong market trend recently with no room for decline. Stable and sufficient hydropower supply in Southwest China guarantees the steady mass production of industrial silicon. Coupled with routine stockpiling procurement from downstream silicone monomer enterprises, industrial silicon prices have long remained flat, setting the minimum cost threshold for silica production. Tight regional supply of water glass, stemming from constrained quartz sand feedstock and rotating maintenance-induced production cuts across factories, has prompted many manufacturers to moderately raise factory prices, continuously squeezing profit margins of silica producers and greatly weakening their willingness to cut prices for sales. Methylchlorosilane monomers, the core feedstock for fumed silica, have long maintained high prices. Some major monomer producers have restricted shipments and suspended quotations for scattered retail orders to tighten market supply, and persistently high raw material costs are being transmitted downstream. Divergent cost transmission has further stratified the market: low-end conventional precipitated silica receives weak cost support with limited upside potential and mainly fluctuates within a range; high-end fumed silica boasts ample cost backing and strong resistance to price declines. No drastic changes are expected in the upstream supply-demand pattern in the near future. Raw material costs will continue to underpin the silica market, ruling out the possibility of an overall sharp slump.
The polarization of downstream demand has grown increasingly prominent. Traditional rubber application sectors are mired in sluggish off-season conditions, while high-end tracks covering new energy, fine chemicals and optoelectronic new materials enjoy booming demand. The interplay between the two has shaped the highly distinctive structural market trend prevailing today. As the downstream segment consuming the largest volume of silica, the tire industry is constrained by staggered high-temperature maintenance and weak demand for replacement tires for civilian vehicles. The overall capacity utilization rate of domestic tire manufacturers has fallen to 75%–80%, more than ten percentage points lower than spring and autumn peak seasons. Tire purchasers have adopted a highly conservative mindset, thoroughly abandoning the practice of large-scale advance stockpiling and shifting entirely to frequent small-batch replenishment based on actual demand. Large bulk orders are scarce, resulting in muted trading for general reinforcing-grade precipitated silica and severely curbing its upside room. In addition, demand for traditional applications including sports shoe soles, daily rubber fittings, interior and exterior architectural decorative coatings and general plastic fillers has declined synchronously. Slow shipments of finished end products force the industrial chain to keep digesting accumulated inventory from earlier periods, further dragging down the performance of low-end silica grades.
On the contrary, demand in high-end emerging application tracks keeps climbing, fully filling the demand gap brought by the off-season in traditional industries. With the steady year-on-year growth in market penetration of new energy vehicles, lightweight design, low energy consumption and extended driving range have become the mainstream development directions of the tire industry, accelerating the popularization of low rolling-resistance green tires. Thanks to its excellent reinforcement and toughening effects, rolling resistance reduction, wear resistance and anti-aging properties, high-dispersion silica is added in a far higher proportion to new energy vehicle tires than to conventional fuel vehicle tires, driving steady annual demand growth. The continuous expansion of the photovoltaic industry has boosted capacity output of silicone buffer rubber for photovoltaic frames, module sealants and insulating fittings for junction boxes, lifting procurement demand for ultra-fine, low-volatility and high-purity silica steadily. In lithium battery production, modified silica acts as a vital auxiliary material for separator coatings, electrode binders and battery housing sealing components. Niche segments such as supporting parts for 5G base stations, waterproof and insulating components for precision instruments, water-based eco-friendly industrial coatings and oral care polishing abrasives also continuously consume fumed silica and modified precipitated silica. Sustained and robust rigid demand keeps high-end products chronically undersupplied, placing pricing power firmly in the hands of manufacturers.
Currently, product quotations are clearly tiered, with price gaps determined by purity, dispersibility, weather resistance and applicable scenarios. Factory prices of precipitated silica for general rubber reinforcement are mainly between 6,000 and 6,500 CNY per ton. Low-end filler-grade silica is priced lower, mostly used for filling ordinary plastics and low-cost coatings. Ultra-fine high-dispersion silica custom-developed for new energy tires delivers superior comprehensive performance and commands a noticeably higher price than conventional specifications. The fumed silica market has long remained stable with trivial price fluctuations: domestic hydrophilic fumed silica is mostly quoted between 20,000 and 23,500 CNY per ton; hydrophobically modified premium fumed silica suited for stringent electronic sealing and high-temperature working conditions ranges from 25,000 to 28,000 CNY per ton; imported top-tier high-purity fumed silica features premium quality at a higher price, with no obvious price swings recorded throughout the year.
Numerous industrial analysts have conducted comprehensive assessments based on raw material trends, supply-demand fundamentals and seasonal cycles, concluding that late August will still fall within the traditional chemical off-season. Demand for tires, daily rubber goods and other conventional downstream products is unlikely to see concentrated rebounds, so the overall silica market lacks momentum for unilateral sharp gains. Nevertheless, depleted industrial social inventory and firm upstream raw material costs will continuously uphold the market bottom, and prices are expected to maintain a mild upward fluctuating trend. When temperatures drop in September, all cross-industry high-temperature equipment maintenance will be completed. Downstream tire and rubber goods manufacturers will resume full-capacity production one after another. Coupled with sustained order expansion from the new energy vehicle, photovoltaic and lithium battery industrial chains, high-dispersion precipitated silica and high-purity fumed silica will witness concentrated demand growth, unlocking further upside potential for the market.
