(June 3, 2026) With the normalization of domestic chemical industry environmental inspections and the implementation of detailed regulations on energy consumption control, the silica gel industry is undergoing a structural reshuffle. A large number of small and medium-sized silica gel production facilities with outdated technologies and excessive energy consumption have begun to suspend operations for renovation. As a result, the industry’s supply structure is being reorganized, and the market focus is gradually shifting from general-purpose, low-end silica gel to functional modified products.

According to on-site investigations in various industrial parks, in traditional silica gel-producing regions such as Shandong, Jiangxi, and Yunnan, more than a dozen small and medium-sized enterprises that produce silica gel by sedimentation methods have temporarily reduced their production volumes in the past half month due to non-compliance with wastewater and solid waste disposal standards. The elimination of these inefficient small-scale producers has tightened the supply of general-purpose silica gel in the spot market, effectively alleviating the problem of overcapacity in low-end products that existed earlier. Due to this reduction in production capacity, the supply of ordinary industrial-grade silica gel has become scarce, leading to increased reluctance among traders to sell their goods. As a result, spot prices in some areas have slightly increased.

On the raw material side, there have been fluctuations in the regional supply of soda lime and sulfuric acid recently, causing raw material procurement costs to remain high. Coupled with increased expenses for environmental protection measures and exhaust gas treatment, production costs for manufacturers have remained stubbornly high. As a result, manufacturers are less willing to offer discounts or reduce prices, which further stabilizes the market price of silica gel.The demand side shows a clear division between hot and cold segments: purchases in the traditional rubber shoe materials and ordinary coatings sectors remain sluggish, with purchases mainly based on actual need, resulting in limited demand-driven growth. However, there has been a surge in orders for lithium-ion battery electrolyte additives, thermal conductive silicone, agricultural slow-release carriers, and specially modified silica for new energy sealing strips. As the new energy industry chain continues to expand, downstream manufacturers of new materials are increasingly purchasing customized silica. Many silica producers are adjusting their production line compositions, reducing the capacity for general-purpose grades, and increasing production of high-value-added modified products.

In the foreign trade market, many European and American countries have introduced new environmental regulations for rubber products that restrict the use of heavy metal fillers. This has opened up an export opportunity for environmentally friendly domestic silica. The number of inquiries from overseas buyers for high-purity modified silica has increased, and there are more trial order requests from buyers in Europe and South America, leading to a steady rise in exports of high-end silica. This effectively compensates for the weak domestic demand in these sectors.

Industry analysts suggest that under the long-term guidance of carbon reduction and environmental protection policies, the trend of phasing out outdated production capacity in the silica industry will continue. In the future, industry profits will increasingly concentrate among leading manufacturers with environmental certification and advanced R&D capabilities.In the short term, new material companies in the downstream sector may experience a phase of inventory replenishment in the mid to late June. Functional silica still has the potential for price increases, while low-end ordinary silica is supported by reduced production capacity, maintaining a market trend that is stable with a slight upward bias.