Industrial Watch · April 19, 2026Recently, the domestic silica market has been caught in a dual dilemma of cost inversion and diverging demand, prompting both leading enterprises and small and medium-sized manufacturers to adjust their strategies. Industry leaders are stabilizing profits through "production control & price protection + technological upgrading", while small and medium-sized players are turning to customized niche sectors for survival. Industry competition is rapidly shifting from "price involution" to "value-based competition".

I. Cost Inversion Pressures Industry Profitability; Production Control & Price Protection Become Short-Term Consensus

Prices of core raw materials for silica production, such as sulfuric acid and sodium silicate, have remained high. Meanwhile, downstream demand for standard precipitated silica is weak, resulting in cost inversion between product selling prices and production costs. Mainstream standard-grade silica is quoted at around 6,300 yuan per ton. Coupled with raw material, energy and environmental costs, the unit production cost has reached 5,800–6,100 yuan per ton, squeezing corporate gross margins to single digits. Some small and medium-sized manufacturers operate at less than 50% capacity, trapped in a situation where "production means losses". To ease profit pressures, leading enterprises in major producing regions including Fujian and Shandong jointly issued a Silica Industry Self-Discipline Initiative, calling for "production control, price stabilization and orderly scheduling". By cutting standard-grade capacity and optimizing inventory structures, they have prevented further price declines. Some leading enterprises have also hedged against raw material price hikes through long-term fixed-price contracts and supply chain cost optimization, temporarily stabilizing market profit expectations.

II. SMEs Seek Breakthroughs; Customized Niche Products Become a "Lifeboat"

Faced with cutthroat competition in the standard product market, a large number of small and medium-sized manufacturers have abandoned "low-price volume grabbing" and shifted to high value-added customized sectors to achieve differentiated breakthroughs.

• Custom rubber grades: Developing specialized products with low viscosity, high wear resistance and low-temperature tolerance for green tires and silicone rubber products, commanding a 30%–50% premium over standard grades.
• Custom emerging applications: Expanding into niche sectors such as agricultural carriers, pet food additives and photovoltaic glass auxiliaries, developing food-grade and pharmaceutical-grade low-heavy-metal silica. Some enterprises have signed exclusive supply agreements with downstream clients.
• Customized production processes: Adopting small intelligent production lines to accommodate small-batch, multi-run customized orders, avoiding risks of large-scale overcapacity.

"Although customized orders have small minimum volumes, they deliver stable profits and help us avoid price wars for standard products," said a person in charge of a small and medium-sized silica enterprise in East China. Currently, customized products account for 40% of the company’s total output, up from 15% last year, with significantly improved profitability.

III. Long-Term Industry Breakthrough: Technological Upgrading and Industrial Chain Collaboration

Insiders pointed out that short-term production control and price stabilization can only alleviate conflicts. Long-term industry development relies on technological upgrading and industrial chain collaboration.

• Technology: Leading enterprises are accelerating the deployment of fumed silica and low-carbon processes such as carbon dioxide acidification, raising the self-sufficiency rate of high-end products and reducing reliance on imported high-grade silica.
• Collaboration: Enterprises are proactively engaging with downstream leaders in tires, photovoltaics and electronics, participating in client product R&D to achieve deep integration of "customized R&D + stable supply" and enhance risk resilience.
• Consolidation: Industry consolidation continues. Small and medium-sized manufacturers are integrating resources through mergers, acquisitions and joint ventures to improve scale and technical strength and avoid disorderly competition.

Industry projections suggest that in the second half of 2026, as customized demand gradually unfolds and raw material prices stabilize, the silica industry will emerge from the cost inversion cycle. Prices of standard-grade products are expected to gradually firm up, while the share of high-end customized products will keep rising. The sector as a whole will transition toward refinement, high-end development and coordinated integration.