In late August, China’s chemical industry remains in the traditional summer off-season. Sustained high temperatures increase operation and maintenance pressure for chemical facilities across many regions, and logistics timelines slow down in some areas. Trading sentiment across the bulk chemical market turns conservative. Prices of most basic chemical raw materials fluctuate within a narrow range without clear unilateral drivers. Against this backdrop, the silica market continues its years-long structural divergence. The focus of industrial competition keeps shifting; the old growth model reliant on capacity expansion and low-price high-volume sales is no longer viable. Continuous iteration of powder surface modification technology has become the key factor widening gaps between manufacturers. The market for ordinary unmodified precipitated silica features ample supply, muted procurement demand from traditional downstream industries, persistent inventory backlogs and shrinking product margins, resulting in fierce competition. In contrast, differentiated silica with proprietary surface modification can adapt to formulation systems in various industries and effectively improve key properties such as powder dispersibility, compatibility, water resistance and reinforcement performance. These products are well received by high-end downstream customers, with extended order delivery cycles and stable premium margins, releasing lasting development potential across niche segments.

　　From an overall supply perspective, mainstream production lines at major domestic silica manufacturing bases operate steadily. Units previously shut down for maintenance and environmental upgrades have resumed normal output, delivering sufficient basic filler supply to meet regular procurement needs of traditional sectors including rubber and coatings. Nevertheless, contradictions stemming from product homogenization keep intensifying. Massive capacity of general precipitated silica has entered the market, and oversupply of low-end grades remains difficult to ease. Many small and medium-sized manufacturers cut selling prices continuously to maintain continuous production, dragging down overall industrial profitability. Some long-loss, technologically outdated production lines face shutdown and elimination. The differentiated modified silica track presents a sharp contrast: powder modification imposes high requirements on reaction equipment, modifier selection, process parameter control and finished-product testing, with a lengthy technology accumulation cycle and limited new effective capacity entering the sector. Modified production lines operated by leading enterprises mostly adopt flexible manufacturing to adjust modification formulas according to customer requirements. Production schedules are prelocked, tradable spot goods are limited, finished goods inventory stays low, manufacturers hold stronger pricing power and generally avoid low-end price competition. Many leading groups have built independent application R&D centers to conduct joint formulation development with downstream clients, further reinforcing technical moats and widening gaps with smaller peers.

　　In terms of upstream raw materials and comprehensive costs, prices of sodium silicate, sulfuric acid, various organic modification additives, industrial steam and electricity have seen minor fluctuations recently. Direct raw material costs exert limited influence over finished silica pricing. Cost competition is no longer the core battlefield of the industry; comprehensive management of modified additive procurement, process energy consumption control, product testing and formulation technical services carries greater weight. Large enterprises with integrated supporting modification workshops and self-developed modification formulas can achieve independent control over modification procedures, effectively cut extra costs from external processing and guarantee batch consistency. Small and medium-sized factories without independent modification capacity mostly outsource processing or purchase ready-made modified powder, facing higher production costs and limited flexibility in adjusting product performance, weakening their competitiveness when serving high-end customers. Coupled with tightening environmental and energy consumption policies, SMEs face rising investment in pollution governance and further squeezed profit margins, accelerating industrial consolidation.

　　Booming demand for formulation upgrading across downstream segmented industries fuels market expansion of differentiated modified silica. In the tire sector, green tire formulas keep optimizing. Highly dispersible hydrophobically modified silica can reduce rolling resistance and boost wear performance. Major tire manufacturers continuously adjust powder dosage, driving steady growth in purchases of relevant products. The coating industry advances toward high performance: matte wood coatings, industrial anti-corrosion topcoats and water-based architectural coatings impose higher standards for powder matting efficiency and anti-settling capacity, broadening the application scope of specialty matting modified silica. In the silicone products sector, formulas for compounded and liquid silicone rubber keep iterating, and specialty modified silica improves transparency and mechanical strength of finished goods, supporting steady demand growth. Within the new energy track, lithium battery separator coating, photovoltaic encapsulant films and energy storage sealing materials undergo continuous upgrades, pushing up demand for low-impurity, highly dispersible fumed modified silica. In addition, sectors including pesticide formulations, high-end daily chemicals and pharmaceutical excipients enforce stricter controls over powder compatibility and safety indicators, further promoting the market development of custom modified silica.

　　In foreign trade exports, differentiated modified silica has emerged as a new growth driver for domestic powder exports. Historically, China’s silica exports were dominated by general unmodified precipitated grades, which easily triggered overseas anti-dumping investigations and trade barriers when competing via low prices. This year, domestic raw material producers have actively optimized export portfolios and expanded exports of various custom modified silica. New tire, coating and new material projects in Southeast Asia and the Middle East continuously release procurement demand, while European and American markets maintain steady demand for high-performance modified powder. Overseas buyers attach greater importance to modification technology, batch stability and supporting formulation services. High-quality overseas orders divert domestic supplies of differentiated modified silica, effectively easing tightness in high-end segments and supporting firm pricing. Meanwhile, overseas orders push domestic enterprises to refine modification technologies and help domestic powder brands expand globally.

　　Industry research institutes analyze that the high-low divergence pattern in the silica market will not shift noticeably in the short run. General unmodified precipitated silica faces loose supply and demand and is likely to maintain weak volatile performance. Various custom modified differentiated silica benefits from demand support across multiple downstream sectors, enjoying sufficient market resilience and stable pricing. Approaching the traditional “Golden September” chemical stocking cycle, tire, coating and new material manufacturers will gradually launch autumn procurement, and high-performance modified silica is expected to witness concentrated purchasing activity. In the medium and long term, as downstream products across all industries continue upgrading, demand for custom modified powder will keep rising while the market space for basic single-function fillers shrinks. Developing differentiated products through surface modification technology will become the core long-term development direction for silica manufacturers.

　　For participants across the industrial chain, downstream formulation enterprises can coordinate sample testing with raw material suppliers in advance, select modified silica compatible with their systems and formulate reasonable stocking schedules to avoid supply shortages during peak seasons. Upstream producers should accelerate technical layout, increase investment in powder surface modification R&D, build supporting application testing platforms, deliver formulation technical support for customers and transform from pure raw material suppliers into material solution providers. Trading and distribution enterprises can cultivate vertical niche tracks, establish differentiated supply systems and tap value-added circulation potential for custom modified silica. In the long run, powder modification R&D capability, flexible customized production capacity and supporting technical service standards will determine manufacturers’ market standing, and the industry will further accelerate its shift toward refinement and differentiation.