Mid-August has arrived, with sweltering heat lingering across the country. Chemical industrial clusters including East China, North China, Central China and South China have fully entered the traditional summer demand off-season. Persistent high temperatures have drastically increased workplace safety management pressure on chemical enterprises, with equipment enduring heavy heat dissipation loads. Most factories widely adopt staggered production and rotating shutdown arrangements for equipment maintenance. Meanwhile, the overall end consumption market stays sluggish: demand for private car tire replacement has declined, production and sales of small daily rubber goods have slowed, and order volumes for interior and exterior architectural coatings have dropped noticeably.

　　Looking back on the same period in previous years, the silica industry was often dragged down by shrinking downstream procurement, leading to a weak overall market and gradually falling transaction prices. However, the market landscape has undergone a marked shift in 2026. Bolstered by steady upstream raw material costs, coordinated production cuts and price stabilization measures carried out by major domestic silica manufacturers, coupled with long-term stable rigid procurement demand from emerging industries such as new energy vehicles, photovoltaic supporting encapsulation, lithium battery manufacturing and precision electronic component processing, the overall silica market has broken away from its previous downward volatile trend and achieved steady mild gains. Product stratification has become increasingly prominent: low-end filler-grade silica features balanced supply and demand with trivial annual price fluctuations; high-end functional silica with high dispersibility, low volatility, hydrophobicity and heat resistance suffers tight spot supply and consistently firm factory prices.

　　According to full-day statistical data released by domestic silicone industry information platforms and bulk commodity monitoring agencies on August 12, the comprehensive benchmark quotation for domestic silica stood at 6,000 CNY per ton, a slight increase from the previous day, with a cumulative rise of over 1% since early August. The minor correction in late July has been fully reversed, further consolidating the market bottom. Obvious gaps exist across product segments: precipitated silica recovers slowly merely on sporadic rigid replenishment orders from downstream buyers with modest, restrained gains; high-purity fumed silica has long traded steadily at high levels with minimal annual price swings. The huge disparity in spot supply and demand vividly reflects the bipolar cold and hot landscape of the market.

　　In terms of overall supply conditions, the average operating rate of domestic silica production facilities is steadily maintained between 62% and 65%, distinctly lower than full-capacity output during spring and autumn peak sales seasons. The industry is strongly motivated to curb capacity release and resolve the long-standing chronic issue of overcapacity. Prolonged high heat impedes continuous chemical production, raising equipment failure risks and various potential safety hazards. Local emergency management authorities have simultaneously launched special summer workplace safety inspections and routine environmental supervision checks.

　　Across the five core production regions of Shandong, Jiangsu, Jiangxi, Hubei and Hunan, numerous small and medium-sized processing plants have voluntarily reduced production line operating loads. Some aging, energy-intensive production lines equipped with outdated environmental facilities have been suspended for maintenance, steadily cutting the total volume of silica circulating in the market and effectively alleviating the prolonged supply-demand imbalance. Meanwhile, leading domestic silica enterprises have reached a sector-wide consensus, thoroughly abandoning the extensive low-price dumping model previously used to seize market share. Production and delivery schedules are strictly formulated based on actual order volumes from downstream partners, with flexible shipment volume control; no arbitrary price cuts or dumping will be conducted merely to boost sales performance.

　　Currently, overall industrial social inventory has fallen to an annual low. Conventional silica for general rubber reinforcement and plastic fillers boasts an inventory turnover cycle of roughly one week, marking a rough balance between supply and demand. In contrast, there is a substantial spot shortage of high-dispersion precipitated silica and hydrophobically modified fumed silica applied to low rolling-resistance new energy tires, photovoltaic sealing silicone rubber, lithium battery separator coatings, as well as waterproof insulation encapsulation for electronic components. Orders held by many leading manufacturers have been scheduled into early September, and the tight supply situation cannot be effectively improved in the short term.

　　Upstream raw materials have maintained a strong and firm uptrend, building a solid cost protection system for silica and serving as the core driving force behind the market’s rebound from decline. Three fundamental raw materials indispensable for precipitated silica production — water glass, industrial silicon and concentrated sulfuric acid — have trended steadily upward recently with no downward momentum in sight. Sufficient stable hydropower supply in Southwest China guarantees stable mass production of industrial silicon. Supported by routine stockpiling procurement from downstream silicone monomer enterprises, industrial silicon prices have plateaued for a long time, setting the minimum cost threshold for silica production.

　　Tight regional supply of water glass, caused by constrained quartz sand feedstock and rotating maintenance-induced production cuts at factories nationwide, has prompted many manufacturers to moderately raise factory prices, continuously squeezing profit margins of silica producers and greatly weakening their willingness to cut prices for sales. Methylchlorosilane monomers, the core feedstock for fumed silica, have remained at high prices for a long time. Some major monomer producers limit shipments and suspend quotations for scattered retail orders to tighten market supply, and persistently high raw material costs are continuously transmitted downstream.

　　Due to uneven cost transmission intensity, market stratification has grown more distinct: low-end conventional precipitated silica lacks sufficient cost support with limited upside potential, fluctuating sideways within a range; high-end fumed silica enjoys ample raw material cost support and strong resistance to price declines. No drastic changes will occur in the upstream supply-demand pattern in the near term. Raw material costs will keep underpinning the silica market, ruling out the possibility of an overall sharp crash.

　　The polarization of downstream demand keeps intensifying. Conventional rubber application sectors are trapped in sluggish off-season conditions, while high-end tracks covering new energy, fine chemicals and optoelectronic new materials enjoy booming demand. The offset between the two forms a highly recognizable structural market trend. As the downstream sector consuming the largest volume of silica, the tire industry is restrained by staggered high-temperature maintenance and weak demand for replacement tires for civilian vehicles. The overall capacity utilization rate of domestic tire manufacturers has dropped to 75%–80%, more than ten percentage points lower than spring and autumn peak seasons.

　　Tire purchasers hold a conservative and prudent attitude, completely abandoning large-scale advance stockpiling and shifting entirely to frequent small-batch replenishment based on actual demand. Large bulk orders are scarce, directly leading to sluggish trading for general reinforcing-grade precipitated silica and severely compressing its upside space. In addition, demand for traditional applications including sneaker soles, daily rubber fittings, interior and exterior architectural decorative coatings and general plastic fillers has declined synchronously. Slow shipments of finished end products force the industrial chain to keep digesting accumulated inventory from earlier periods, further dragging down the performance of low-end silica grades.

　　On the contrary, demand in high-end emerging application tracks rises steadily, fully filling the demand gap brought by the off-season in traditional industries. As the market penetration rate of new energy vehicles climbs year by year, lightweight design, low energy consumption and extended driving range have become mainstream development directions for the tire industry, accelerating the popularization of low rolling-resistance eco-friendly tires. Featuring outstanding reinforcement and toughening effects, rolling resistance reduction, wear resistance and anti-aging properties, high-dispersion silica is incorporated in a far higher proportion into new energy vehicle tires than conventional fuel vehicle tires, driving steady annual demand growth.

　　The continuous expansion of the photovoltaic industry unlocks rising capacity for silicone buffer rubber for photovoltaic frames, module sealants and insulating junction box components, lifting procurement demand for ultra-fine, low-volatility and high-purity silica consistently. In lithium battery production, modified silica acts as a key auxiliary material for separator coatings, electrode binders and battery housing sealing parts. Niche segments such as supporting components for 5G base stations, waterproof insulating parts for precision instruments, water-based eco-friendly industrial coatings and oral care polishing abrasives also continuously consume fumed silica and modified precipitated silica. Sustained and robust rigid demand keeps high-end products chronically undersupplied, putting pricing power firmly in the hands of manufacturers.