Mid-August has arrived, with intense heat lingering across the nation. Chemical hubs spanning East China, North China, Central China, South China and beyond have officially entered the annual traditional summer demand off-season. Persistent high temperatures have greatly raised workplace safety management pressure for chemical enterprises and increased heat dissipation burdens on equipment. Most factories have widely adopted staggered production and rotating shutdown schedules for equipment maintenance. Meanwhile, the overall end consumer market remains muted: demand for private car tire replacement has dipped, production and sales of small daily rubber goods have slowed down, and orders for interior and exterior architectural coatings have shrunk markedly. In previous years, the silica industry often suffered a downturn with gradually falling transaction prices amid shrinking downstream procurement. However, the market operational logic has undergone a notable shift in 2026. Backed by firm upstream raw material costs, coordinated production cuts and price stabilization plans rolled out by major domestic silica manufacturers, plus steady long-term rigid procurement demand from emerging industries including new energy vehicles, photovoltaic supporting encapsulation, lithium battery production and precision electronic component manufacturing, the overall silica market has pulled out of its prior downward volatile trend and posted modest steady gains. Product stratification has become increasingly pronounced: low-end filler-grade silica boasts balanced supply and demand with negligible annual price swings; high-end functional silica featuring high dispersibility, low volatility, hydrophobicity and heat resistance is in tight spot supply with consistently firm factory quotations.
Full-day monitoring data released by domestic silicone industry information platforms and bulk commodity agencies on August 12 shows the comprehensive benchmark quotation for domestic silica stood at 6,000 CNY per ton, a mild uptick from the previous day and a cumulative increase of over 1% since early August. The slight pullback in late July has been fully recouped, solidifying the market bottom further. Clear gaps exist in performance across different categories: precipitated silica recovers slowly merely on sporadic rigid downstream replenishment orders with mild, restrained gains; high-purity fumed silica has long traded steadily at high levels with minimal annual price fluctuations. The massive disparity in spot supply and demand vividly illustrates the stark divergence between thriving and sluggish segments of the market.
From the perspective of overall supply conditions, the average operating rate of domestic silica production facilities is stably held between 62% and 65%, distinctly lower than full-capacity output during spring and autumn peak sales seasons. The industry is clearly intent on curbing capacity release to resolve its long-standing overcapacity dilemma. Prolonged high heat hampers continuous chemical production, raising equipment failure rates and potential safety hazards. Local emergency management authorities have concurrently carried out special summer workplace safety inspections alongside routine environmental supervision. Across the five core production regions of Shandong, Jiangsu, Jiangxi, Hubei and Hunan, numerous small and medium-sized processing plants have voluntarily reduced production line loads. Some aging, energy-intensive production lines with outdated environmental facilities have been suspended for maintenance, steadily trimming total silica circulating in the market and effectively easing the prolonged supply-demand imbalance.
Meanwhile, leading domestic silica enterprises have reached a sector-wide consensus, completely abandoning the extensive low-price dumping model used previously to seize market share. Production and delivery are strictly arranged based on actual order volumes from downstream partners, with flexible shipment pacing; no arbitrary price cuts or dumping are implemented solely to boost sales performance. At present, overall industrial social inventory has declined to an annual low. Conventional silica for general rubber reinforcement and plastic fillers carries an inventory turnover cycle of roughly one week, marking a rough supply-demand balance. In contrast, high-dispersion precipitated silica and hydrophobically modified fumed silica applied to low rolling-resistance new energy tires, photovoltaic sealing silicone rubber, lithium battery separator coatings and waterproof insulation encapsulation of electronic components face a substantial spot shortage. Orders at many leading manufacturers have been scheduled into early September, and the tight supply situation cannot be effectively alleviated in the short run.
Upstream raw materials have maintained a strong, firm uptrend, forming a robust cost buffer for silica and serving as the core driver behind the market’s rebound from decline. Three essential feedstocks for precipitated silica production — water glass, industrial silicon and concentrated sulfuric acid — have trended steadily upward lately with no downward momentum in sight. Sufficient stable hydropower supply in Southwest China ensures consistent mass production of industrial silicon. Coupled with routine stockpiling purchases from downstream silicone monomer enterprises, industrial silicon prices have plateaued long-term, setting the minimum cost threshold for silica manufacturing. Tight regional availability of water glass, caused by constrained quartz sand feedstock and rotating maintenance-induced production cuts at factories nationwide, has prompted many suppliers to moderately raise factory prices, continuously squeezing profit margins for silica producers and sharply reducing their willingness to slash prices for sales.
Methylchlorosilane monomers, the core feedstock for fumed silica, have remained elevated for a long time. Some major monomer producers have restricted shipments and suspended quotations for scattered retail orders to tighten market supply, passing persistently high raw material costs downstream. Uneven cost transmission has deepened market stratification: low-end conventional precipitated silica lacks sufficient cost support with limited upside, fluctuating sideways within a range; high-end fumed silica enjoys ample cost backing and strong resistance to price drops. No dramatic shifts are expected in the upstream supply-demand landscape in the near term. Raw material costs will continue to underpin the silica market, ruling out the risk of an overall sharp crash.
Downstream demand polarization has intensified unabated. Conventional rubber application sectors are trapped in off-season stagnation, while high-end tracks including new energy, fine chemicals and optoelectronic new materials enjoy booming demand. The offset between the two has forged a highly recognizable structural market trend. As the largest downstream consumer of silica, the tire industry is weighed down by staggered high-temperature maintenance and weak replacement tire demand for civilian vehicles. The overall capacity utilization rate of domestic tire manufacturers has fallen to 75%–80%, over ten percentage points lower than spring and autumn peak seasons. Tire purchasers remain conservative and prudent, abandoning large-scale advance stockpiling entirely in favor of frequent small-batch restocking based on actual needs. Large bulk orders are scarce, resulting in sluggish trading for general reinforcing-grade precipitated silica and severely limiting its upside potential.Additionally, demand for traditional applications such as sneaker 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 opposite end, demand in high-end emerging application tracks keeps rising, fully filling the demand gap brought by the off-season in traditional industries. As the market penetration rate of new energy vehicles climbs steadily year by year, lightweight design, low energy consumption and extended driving range have become mainstream development directions for the tire sector, accelerating the popularization of low rolling-resistance eco-friendly tires. Boasting outstanding reinforcement and toughening effects, rolling resistance reduction, wear resistance and anti-aging properties, high-dispersion silica is incorporated in far higher proportions into new energy vehicle tires than conventional fuel vehicle tires, driving steady annual demand growth.
The continuous expansion of the photovoltaic industry has unlocked rising capacity for silicone buffer rubber for photovoltaic frames, module sealants and insulating junction box components, lifting procurement demand for ultra-fine, low-volatility, high-purity silica consistently. Within lithium battery manufacturing, modified silica acts as a vital auxiliary material for separator coatings, electrode binders and battery housing sealing parts. Niche segments including 5G base station supporting components, waterproof insulating parts for precision instruments, water-based eco-friendly industrial coatings and oral care polishing abrasives also continuously consume fumed silica and modified precipitated silica. Sustained 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 for precipitated silica used for general rubber reinforcement mainly range from 6,000 to 6,500 CNY per ton. Low-end filler-grade silica is priced lower, mostly applied to ordinary plastics and affordable coating filling. Ultra-fine high-dispersion silica custom-developed for new energy tires delivers superior comprehensive performance and commands a noticeably higher price than standard specifications.
