Mid-August brings persistent high temperatures across China, fully ushering in the traditional summer off-season for the chemical industry. The silica sector has seen no overall drastic price swings, while structural divergence has deepened further. Restrained by the sluggish domestic tire industry in the off-season, conventional precipitated silica faces slower domestic purchasing and mild price declines. Benefiting from steady domestic demand growth in photovoltaic encapsulation, lithium battery supporting materials and organosilicon materials, coupled with rising overseas export orders, high-end fumed silica suffers tight supply and maintains firm prices. The mismatch between domestic and overseas demand has become the core pillar propping up the overall market. Multiple factors including widening regional gaps in upstream raw material prices, tiered production arrangements among manufacturers, and the shift between old and new downstream demands are intertwined, clarifying the industry’s operating logic: low-end products weaken amid the off-season, whereas high-end varieties stay strong backed by rigid demand.
Upstream raw materials deliver limited cost support, accompanied by stark north-south market divergence, which fails to drive unified price movements nationwide. Sodium silicate, the core feedstock for precipitated silica, boasts sufficient national production capacity and smooth commodity circulation, with mainstream factory prices staying stable for a long time. Only a few areas in North China witness a slight price hike of less than 2% due to regulatory controls on quartz sand mining and minor rises in short-distance logistics fees, which barely lifts the production costs of precipitated silica. East and South China, home to concentrated chemical enterprises, hold ample supplies, granting buyers strong bargaining power and keeping sodium silicate prices flat. The sulfuric acid market displays more prominent regional disparities: downstream chemical facilities in East and South China operate at low loads on demand, leading to shrinking sulfuric acid consumption and mounting inventory. Manufacturers slash prices to accelerate capital recovery, resulting in a month-on-month drop. In contrast, North and Northwest China maintain steady rigid demand from metallurgy and mining sectors; coupled with climbing long-distance cross-provincial logistics costs, sulfuric acid edges up slightly. The widening north-south raw material cost gap expands negotiated price discrepancies of precipitated silica across regions, making unified nationwide price trends impossible. On the whole, raw material prices fluctuate within a narrow range, neither fueling widespread price hikes nor triggering sharp declines, leaving the cost side in a stalemate.
Production operates in tiers across the supply side. Leading enterprises prioritize long-term contracts to sustain stable output, while small and medium manufacturers arrange production on demand to curb inventory buildup; new capacity poses no short-term impact. At present, the comprehensive operating rate of domestic silica ranges from 76% to 82%. Large-scale leading producers hold abundant long-term domestic and overseas supply contracts. To guarantee consistent product quality and on-time delivery, they run production lines at full capacity continuously, strictly keeping finished goods inventory at a low level and refusing arbitrary price cuts for sales. Constrained by thin profit margins, periodic environmental inspections, annual equipment maintenance and sluggish off-season demand, small and medium-sized factories actively reduce operating rates and arrange production only after receiving orders to avoid inventory backlogs and losses from subsequent price drops. The launch schedule of new capacity has slowed down markedly. Only a small precipitated silica project is undergoing equipment commissioning with limited output and an undetermined official launch date, which will not disrupt the existing supply-demand balance in the short run.
Supply conditions vary sharply by product grade: conventional industrial-grade precipitated silica is amply stocked with flexible bargaining terms for bulk purchases; high-dispersity tire-specific precipitated silica has constrained capacity, with major factories prioritizing fixed key clients and extending delivery cycles for scattered buyers; sustained consumption by the organosilicon industry tightens domestic fumed silica supply; imported premium fumed silica arrives in insufficient quantities due to overseas capacity allocation delays, maritime shipping hold-ups and prolonged customs clearance procedures, further amplifying its scarcity. As of August 12, mainstream tax-inclusive nationwide quotations are listed below: general rubber-grade precipitated silica: 6,400–7,550 RMB/ton; mid-range domestic fumed silica: 20.1–24 RMB/kg; premium fumed silica tailored for photovoltaics and silicone rubber: 25–29 RMB/kg; ultra-high-purity imported fumed silica: 28.5–39.2 RMB/kg, forming a clear price hierarchy.
Polarized domestic demand coupled with recovering foreign trade reshapes the off-season operation rhythm of the industry. The tire and rubber sector, the largest traditional domestic consumer, is mired in its summer downturn. Slumping automobile production and sales lead to accumulating finished tire inventory, prompting tire plants to cut operating rates. Purchasers only place small orders for immediate production needs with no willingness for bulk stockpiling, directly dragging down trading volumes of ordinary precipitated silica. Nevertheless, the steady popularization of lightweight green tires and the gradual replacement of carbon black by high-dispersity silica remain a long-term trend, underpinning prices of high-grade precipitated silica.
Emerging domestic sectors maintain robust growth: booming production of vinyl silicone rubber, liquid silicone rubber and electronic silicone gel generates steady rigid demand for fumed silica as a reinforcing filler; thriving sales of photovoltaic sealants and thermal conductive potting materials continuously consume ultra-fine fumed silica; demand for lithium battery separator coating surges by over 45% year-on-year, evolving into a core growth driver for high-end silica. Besides, steady scattered demand from ink & coatings, food anti-caking agents, daily cosmetics and feed additives offsets the demand deficit caused by the downturn of traditional industries.
Overseas exports serve as another vital prop. Recently, purchasing orders from Southeast Asia, the Middle East and Europe have risen steadily. Rubber goods, daily chemical and photovoltaic supporting industries overseas maintain stable operation. Chinese products stand out with prominent cost-performance advantages, driving growing export volumes of precipitated silica and conventional fumed silica. Overseas sales effectively digest surplus domestic capacity and prevent sharp declines in prices of low-end grades.
Industrial monitoring institutions forecast that the structural divergence will persist through late August. Dragged by the off-season domestic tire market, prices of conventional precipitated silica will edge down slightly with flexible negotiation ranges. Backed by rigid demand from new energy and organosilicon industries as well as stable foreign trade orders, together with tight spot supply, high-end fumed silica will retain firm prices. When the autumn peak season kicks off in September, demand from domestic tire, construction and coating industries will rebound collectively. Coupled with continuous overseas export orders, the entire silica market is expected to witness comprehensive price recovery.
Anhui IOTA boasts a full industrial chain layout in organosilicon. We supply precipitated silica with diverse specific surface areas and a complete range of high-purity fumed silica products, widely applied in rubber reinforcement, photovoltaic sealants, lithium battery separators, silicone rubber, daily chemicals and coatings. Customized indicators, sample delivery, bulk and small-batch spot delivery are all available. We also provide one-stop technical services including filler ratio matching and formula debugging to satisfy procurement demands from domestic manufacturers and overseas export suppliers.
