August 23, 2026. China’s silica market continues to operate under a structurally divergent pattern. According to monitoring data from 100ppi, the benchmark quotation of silica stood at 6033.33 yuan per ton on the day, edging up slightly compared with the beginning of this month and staying within a relatively high range for the year. The gaps in price trends and supply-demand balance among different grades keep widening, further highlighting the industry’s features of fierce low-end competition and tight high-end supply. Entering late August, sustained high temperatures across many regions in China prolong the traditional off-season of the chemical sector. Downstream industries including tires, general rubber products and conventional coatings report lower-than-expected operating rates, and market participants show little willingness for bulk stocking, resulting in muted overall trading sentiment. Nevertheless, demand remains steady in high-value-added sectors such as new energy supporting facilities, high-end silicone rubber and special sealing materials, sustaining firm prices for special modified silica and fumed silica, which serve as core pillars supporting the overall profitability of the industry.

　　The upstream raw material market sees divergent consolidation, delivering differentiated cost support for silica production. Sodium silicate, the primary feedstock for precipitated silica, has sufficient market supply with limited quotation fluctuations in mainstream manufacturers. Soda ash prices rise slightly in some local areas, pushing up production costs of sodium silicate to a certain extent, yet downstream buyers hold weak bargaining power, blocking the pass-through of rising costs. Sulfuric acid shows obvious regional price divergence: ample supply keeps prices stable and soft in East and South China, while partial plant maintenance tightens supply and lifts prices moderately in North and Northwest China. Overall, sulfuric acid exerts limited impact on silica’s total production cost. Metallurgical silicon, the key raw material for fumed silica, maintains solid bottom support. Persistently high raw material costs raise production barriers for high-end products. Coupled with tightening regulation over energy consumption and environmental protection, small and medium-sized enterprises face growing difficulties in launching high-end fumed silica projects, further consolidating the market advantages of leading manufacturers. In general, cost pressures for general precipitated silica cannot be passed downstream, squeezing corporate profit margins continuously. In contrast, high-end functional silica boasts technical barriers and inherent product premiums, which can fully cover expenses for raw materials, R&D and modification processing, securing much healthier profit margins.

　　Operating rates vary sharply on the supply side, with the overall capacity utilization of the industry staying between 70% and 75%. Large leading production lines for precipitated silica run steadily to prioritize order delivery for long-term strategic clients. A large number of small and medium-sized producers operate at 50%-60% load due to insufficient orders and thin profit margins, with some production lines temporarily reducing output or shutting down for maintenance to avoid losses from low-price sales. The pace of new capacity expansion slows down. Most newly commissioned projects in recent years focus on high-value-added varieties such as high-dispersibility silica dedicated to tires and hydrophobically modified fumed silica, while barely any new capacity is added for low-end general precipitated silica. Inefficient backward capacity keeps phasing out, lifting industrial concentration steadily. Inventory levels also show prominent divergence. Factory and social circulating inventories of ordinary industrial-grade precipitated silica both climb, extending the destocking cycle. Ample spot supply leads to slow shipments for traders and weighs on low-end product prices. High-end modified, electronic-grade and medical-grade silica still adopt the build-to-order model with low overall inventory. The order backlog of some grades extends to early September amid tight spot supply, leaving pricing power in the hands of manufacturers.

　　Downstream demand presents a mixed picture: demand recovery is sluggish in traditional fields while emerging tracks keep expanding. As the largest consumer market for silica, the tire industry faces mild recovery in domestic vehicle end consumption and high finished tire inventory pressure. Tire manufacturers report lower operating rates compared with the same period in previous years, and mostly conduct small on-demand restocking instead of bulk procurement, keeping purchases of ordinary precipitated silica stable. However, the upgrading trend toward green and low-carbon tires continues. Low rolling resistance formulations generate rigid demand for high-dispersibility silica, and leading tire companies place long-term fixed orders to sustain stable demand for special high-end tire silica. In traditional application markets including shoe materials, general rubber parts and civil architectural coatings, limited growth in foreign trade orders makes end product manufacturers cautious about production, curbing their purchasing enthusiasm for silica and dragging down transactions of general grades. On the contrary, the new energy industrial chain remains highly prosperous. Sectors such as hydrophobic modification for lithium battery separators, sealing adhesives for photovoltaic modules and encapsulation materials for electronic components keep expanding, imposing strict requirements on silica in terms of purity, dispersibility, temperature resistance and weather resistance, and securing abundant orders for customized functional silica. Besides, emerging application scenarios including food anti-caking agents, pharmaceutical excipients, heavy-duty anti-corrosion coatings and rail transit sealing products keep developing, creating new growth space for high-end silica and driving continuous upgrading of the industry’s product mix.

　　The foreign trade market maintains decent resilience with ongoing optimization of export product structure. Steady basic demand for silica from manufacturing hubs in Southeast Asia, Latin America, the Middle East and other regions supports the overall stability of China’s export volume. Nonetheless, uncertainties such as international carbon tariffs, multilateral trade barriers, volatile ocean freight rates and geopolitical conflicts persist and constrain foreign trade activities. Domestic silica exporters adjust business strategies proactively, gradually withdrawing from low-price overseas competition for generic precipitated silica, and focusing on promoting high-value-added products including high-dispersibility, hydrophobically modified and fumed silica. They cultivate mid-to-high-end clients in Europe, America, Japan and South Korea, steadily lifting the added value of export products and mitigating profit declines caused by cutthroat low-price competition.

　　Looking ahead, the structurally divergent trend of China’s silica market is unlikely to reverse in the short run. Prices of general industrial-grade precipitated silica will fluctuate narrowly with limited upward momentum, while various high-end functionally modified silica will sustain firm prices backed by rigid demand. With the approach of the traditional peak season in September, operating rates of downstream manufacturers producing tires, sealants and coatings are expected to rebound, bringing expectations for a recovery in market transactions. In the medium and long term, the silica industry has bid farewell to the development stage dominated by capacity expansion and entered a high-quality development cycle featuring technological competition, refined customization and low-carbon production. Leading enterprises with independent modification R&D capabilities, integrated supporting services and clean production qualifications will see their competitive advantages keep growing. Functional silica products deeply tied to new energy and high-end new material tracks enjoy broad long-term growth potential. Industry participants should continue tracking changes in upstream raw material prices, the pace of downstream end operating rate recovery, and market fluctuations driven by downstream restocking in the peak season to arrange production, procurement and sales plans rationally.