In mid-September 2026, China's precipitated silica market concluded the previous cost-driven price cycle. The overall market trend is gradually shifting to demand-dominated patterns, with continued narrowing of price fluctuations. The industry has entered a stable operational cycle featuring structural differentiation and diverging market performance. At this stage, mainstream quotations of rubber-grade precipitated silica in China remain steady, while prices of ordinary industrial filler-grade silica linger at low levels. Buyers and sellers hold cautious and rational trading attitudes. There is no obvious momentum for unilateral sharp price rises or falls, and transactions are mainly based on stable pricing, volume clearing and on-demand purchasing.

　　The prices of upstream raw materials, including sodium silicate, soda ash and sulfuric acid, are generally stable with mild fluctuations. The cost support brought by earlier raw material price hikes continues to weaken, and the pulling effect of raw material costs on silica prices has basically faded. The industry has bid farewell to the extensive cycle where product price rises followed raw material cost inflation. Corporate profits no longer rely on market price dividends. Product structure, modification technology and process control have become core factors determining profit levels. Profit margins of small and medium-sized low-end processors keep shrinking, while leading manufacturers of high-end products sustain solid profit advantages.

　　The supply landscape continues to diverge. Major domestic silica producers maintain high and stable operating rates. Sufficient capacity of general-purpose precipitated silica is released, resulting in abundant market supply. Inventory backlog stands out in the low-end market, and small and medium manufacturers face heavy inventory pressure. Low-end products have loose bargaining space and fierce price competition. In sharp contrast, capacity of modified high-dispersion silica and hydrophobic silica for new energy tires, photovoltaic sealants, electronic potting materials and high-end coatings remains tight. Leading enterprises prioritize production schedules for high value-added orders, and delivery cycles of customized special grades keep extending. High-end products consistently maintain stable premiums amid tight supply and demand.

　　Against the backdrop of tightened dual-carbon and environmental protection policies, the phase-out of backward production capacity accelerates continuously. High-energy-consuming and old intermittent production lines are subject to restricted output. Small and medium-sized enterprises lacking R&D capacity and product iteration capabilities gradually withdraw from the market. Industrial capacity, customers and resources keep concentrating on leading enterprises equipped with low-carbon production, continuous processes and independent modification R&D. At present, China ranks first globally in total precipitated silica capacity. Precipitated silica accounts for an absolute majority, while high-end fumed silica capacity is highly concentrated among a small number of leading players. The overall capacity utilization rate stays at a medium-low level. The structural contradiction of severe overcapacity in low-end segments and shortage in high-end segments is further amplified.

　　The downstream demand shows increasingly prominent polarization. The traditional tire industry maintains rigid demand. Downstream factories mainly replenish inventory in small batches as needed and are reluctant to place large bulk orders, providing limited support for ordinary silica demand. However, continuous implementation of green and energy-saving tire policies and rising penetration of new energy vehicle tires push up the proportion of high-dispersion silica in tire formulations. Demand for high-performance reinforcing silica grows steadily, forming the only growth highlight in traditional tracks.

　　Demand in traditional sectors such as silicone sealants, architectural anti-corrosion coatings and industrial rubber and plastic products remains stable without notable increments. Emerging tracks including photovoltaics, energy storage and new energy electronics keep booming, driving rising demand for high-purity, low-impurity, high-reinforcement and weather-resistant modified silica with huge incremental potential. Meanwhile, the health sector covering toothpaste, food additives and pharmaceutical daily chemicals has extremely high access thresholds requiring multiple international authoritative certifications. Qualified domestic manufacturers are scarce. High-purity food-grade and pharmaceutical-grade silica enjoys full orders and rich profits, forming a new profit growth point for the industry with broad import substitution space.

　　In terms of foreign trade exports, global trade rules keep upgrading. Overseas markets impose stricter requirements on products with low-carbon traceability, carbon footprint compliance and green production. Domestic silica enterprises with green production capacity and high-end modification technology see rising competitiveness in overseas markets. Ordinary general-purpose silica faces impacts from Southeast Asian and local overseas production capacity, with transparent export prices and thin profits. High-end tire-grade, fumed and hydrophobically modified silica seize overseas high-end markets steadily relying on stable quality and strong reinforcing performance, realizing import substitution in premium segments.

　　China’s total silica export volume maintained double-digit year-on-year growth in the first half of 2026. Export growth of high-end functional silica far outpaced common products, with robust demand from Europe, America, Southeast Asia and the Middle East. At the same time, continuous capacity expansion in Southeast Asia will intensify export competition for mid-to-low-end silica in the future, forcing domestic enterprises to phase out low-end capacity and deepen high-end customized markets.

　　At the technical iteration level, industry R&D focuses fully on high-end functionalization and green low-carbon transformation. Hydrophobically modified silica, nano high-dispersion silica and high-purity fumed silica become core R&D directions. Leading enterprises keep investing in cutting-edge technologies including in-situ modification, continuous synthesis and green silicon source preparation. Key indicators of products such as particle size, specific surface area, dispersibility and stability gradually reach international top-tier standards.

　　The new energy lithium battery sector becomes the largest incremental blue ocean market. Silica is applied in battery diaphragm coating, electrolyte additives and cell filling materials, requiring ultra-high standards for purity, uniform particle size and low impurities. The domestic substitution rate remains low, making it the core breakthrough track for the industry in the future. Meanwhile, green processes for silica production using rice husk ash and industrial solid waste recycling are gradually industrialized, expected to completely renovate the raw material system of the industry, cut carbon emissions and help enterprises seize dividends from low-carbon markets.

　　The industry competition logic has been thoroughly reconstructed. The low-end market features cost and price competition and severe internal competition. The high-end market competes on modification technology, batch stability, customized services and low-carbon compliance. Leading enterprises with full-industry-chain layout, self-owned silicon sources and independent quality control systems gain remarkable advantages in supply chain stability and product competitiveness with rising bargaining power. Small workshops simply processing purchased raw materials face shrinking living space. Industry mergers and acquisitions speed up, and industrial concentration will rise substantially in the next 2–3 years, solidifying the pattern where strong players grow stronger.

　　Market outlook: In the short term, the domestic silica market will continue the structural trend of weak low-end prices and firm high-end prices. Ordinary filler-grade products lack upward price momentum and will stay low, while high-end modified, high-dispersion and high-purity functional products maintain high premiums and profitable performance. Downstream industries will enter the traditional stocking season in the fourth quarter. Demand in tire, silicone rubber and photovoltaic adhesive sectors will be released intensively, bringing periodic growth in orders and sales of high-end silica, and further widening the profit gap across the industry.

　　In the medium and long run, sustained development of new energy vehicles, photovoltaic power generation, high-end fine chemicals and big health industries will continuously drive incremental demand for high-end silica and serve as the core growth engine of the industry. However, the problem of low-end overcapacity will persist for a long time. The era of revenue growth merely through capacity expansion is over. Future core opportunities of the industry lie in four directions: high-end customization, functional modification, green low-carbon transformation and import substitution. Leading enterprises mastering core modification technologies, low-carbon production processes and stable quality control systems will stay ahead in the market and lock in long-term profit advantages of the sector.