In late August, China’s silica market continues to operate with deep structural divergence. The industry has bid farewell to the old cycle of universal price surges and declines. General‑grade precipitated silica suffers from oversupply and slim profit margins, whereas high‑dispersion tire‑specific, hydrophobically‑modified and electronic‑grade fumed silica enjoy sufficient orders and outstanding price resilience. Operating rates vary greatly across downstream application sectors. New‑energy‑related industries serve as the core engine boosting demand growth for high‑end silica. Exports are confronted with dual tests from overseas carbon regulations and trade barriers. The industry is accelerating its transformation toward technology‑driven and customized‑service‑oriented modes, and industrial reshuffling speeds up further.

  In terms of spot market quotations, mainstream transaction prices for ordinary rubber‑grade precipitated silica stand at 6400‑7600 RMB per ton. Ample market supply brings fierce competition. A large number of small‑and‑medium‑sized manufacturers focus on general grades with severe product homogenization. To secure downstream orders, some enterprises cut quotations voluntarily, creating a noticeable gap between actual transaction prices and listed prices. Profit margins for commodity‑grade products are squeezed to low levels. By contrast, high‑value‑added products such as high‑dispersion silica for green low‑rolling‑resistance tires maintain stable orders from leading tire producers and strong bargaining power without following the downtrend of commodity grades. Hydrophobically‑modified precipitated silica, widely adopted in neutral silicone sealants and special rubber sectors, keeps firm market performance supported by booming silicone‑rubber demand. The fumed‑silica market also shows obvious segmentation. Conventional hydrophilic fumed silica is quoted at 20‑24 RMB/kg, mainstream domestic hydrophobic fumed silica ranges from 25‑33 RMB/kg. Ultra‑high‑purity grades for electronics and semiconductors remain high‑priced. Some premium grades still rely on imports with prominent price gaps between domestic and overseas products.

  On the supply side, China boasts huge overall precipitated‑silica capacity. After multiple rounds of capacity expansion, general‑grade capacity is evidently oversupplied. Under tightened policies for dual‑carbon targets, three‑waste treatment and work‑safety supervision, numerous small‑scale, outdated production units lacking modification technologies frequently operate at reduced loads or suspend intermittently. Obsolete capacity keeps phasing out, and production resources keep concentrating among leading integrated manufacturers. Major players no longer expand commodity‑grade capacity blindly. Instead, they invest heavily in high‑dispersion tire‑grade silica and surface‑modified special grades, developing dedicated products for lithium‑battery and photovoltaic sectors to capture high‑margin markets. Domestic substitution for fumed silica keeps advancing. Local producers break through technical bottlenecks, and the performance of some domestic hydrophobic fumed silica is comparable to overseas counterparts. Nevertheless, special grades with ultra‑low metal‑ion content for semiconductors and pharmaceutical excipients still pose technical barriers, representing key R‑D priorities for domestic enterprises. Pilot projects adopting low‑carbon processes such as carbon‑dioxide acidification for silica production are emerging to lower carbon footprints for export‑oriented markets, and the proportion of such green capacity will rise gradually.

  Regarding raw‑material and production costs, sodium silicate and sulfuric acid, two fundamental feedstocks for precipitated silica, fluctuate within narrow ranges without sharp price swings, leading to limited direct raw‑material cost volatility. Profit erosion mainly stems from comprehensive manufacturing expenses. During hot summer months, water and power consumption stay high, and rigid costs for three‑waste disposal, environmental protection and safety operation keep climbing. Manufacturing hydrophobically‑modified silica requires additional silane‑coupling‑agent modifiers, further lifting production costs. Under such circumstances, volume‑oriented sales of commodity‑grade silica barely generate profits, pushing manufacturers to increase R‑D investment and shift toward functional and customized products. Small‑and‑medium‑sized factories only conducting basic precipitation without post‑modification face mounting operational pressure.

  Downstream demand divergence further widens market gaps. The tire industry remains the largest silica consumer. Rising penetration of new‑energy vehicles increases the filling ratio of high‑dispersion silica in formulations for green low‑rolling‑resistance tires. Major tire manufacturers maintain stable operation and steadily raise procurement volume for premium grades, with strict requirements on dispersion, reinforcing performance and batch consistency while being less price‑sensitive. Small‑and‑medium‑sized tire factories for traditional fuel‑vehicle tires operate at low load rates amid sluggish end‑market consumption, purchasing low‑priced commodity‑grade materials and suppressing purchase prices. In silicone‑rubber and construction‑sealant segments, manufacturers of neutral silicone glass adhesive, fluoro‑silicone rubber and photovoltaic sealing products sustain steady demand for hydrophobically‑modified silica, forming solid fundamental demand for modified grades. Beyond rubber and sealants, non‑rubber sectors deliver fast‑growing demand. Lithium‑battery‑diaphragm coating, electronic packaging fillers, photovoltaic auxiliary materials, coatings, toothpaste and pesticide carriers create new growth opportunities for specialty silica, setting stricter standards for purity, particle‑size distribution and surface‑treatment effects. Traditional segments including shoe soles, ordinary rubber miscellaneous goods and general filler coatings enter seasonal off‑peak periods. Downstream buyers implement hand‑to‑mouth procurement with large‑scale stockpiling disappearing, leading to sluggish trading sentiment.

  In foreign trade, China’s total silica export volume remains high. Southeast Asia, the Middle East and South America act as major export destinations. Local industrial transfer of tire and rubber‑plastic industries fuels steady regional demand growth. However, overseas trade environments keep tightening. The EU CBAM and REACH regulations are updated continuously, imposing stricter mandatory requirements on carbon footprints, heavy‑metal impurities and chemical test reports for imported chemicals. Low‑end commodity silica with high carbon emission and low added value faces growing export resistance and declining purchasing willingness from overseas clients. Modified high‑end silica manufactured with low‑carbon processes and complete test reports gains stronger global competitiveness. Many domestic producers actively adjust export mix, cutting shipments of low‑margin commodity‑grade products and stepping up overseas promotion of high‑dispersion and hydrophobically‑modified silica. Optimized export product portfolio becomes a new industrial trend. Meanwhile, overseas competitors expand capacity, intensifying global competition. Chinese exporters can no longer rely merely on low‑price strategies. Product performance, carbon‑footprint certification and full‑set technical services will become core competitive edges in international markets.

  Noticeable industrial challenges persist. Domestic manufacturers are trapped in structural contradictions of surplus low‑end capacity and insufficient high‑end supply. Many enterprises lack accumulated modification formulas and respond slowly to customized downstream requirements. Batch stability of domestic premium grades still lags behind leading overseas brands. Furthermore, carbon‑accounting and carbon‑footprint systems are still in early development. Numerous small‑and‑medium‑sized factories lack complete carbon data, which will directly affect future overseas order acquisition.

  Market outlook: In the short‑term view, weighed down by seasonal downstream off‑peak consumption, conventional precipitated silica lacks upward momentum and is likely to fluctuate weakly. Price floors are determined by production costs, and price games focus on supply‑demand balance and inventory pressure. Supported by demand from new‑energy sectors, high‑dispersion tire‑grade silica, hydrophobically‑modified grades and fumed silica will maintain firm performance. In the medium‑and‑long‑term perspective, the era of blind extensive capacity expansion has ended. Growth drivers fully shift toward product differentiation and technical‑service capabilities. Enterprises capable of customized surface modification, stable index control and in‑depth collaboration with new‑energy and electronic‑material downstream industries will continuously capture incremental industry dividends. Homogeneous backward capacity will keep exiting. Deep structural divergence and rising industrial concentration will continue, and high‑quality development will serve as the main theme for future industrial evolution.