(June 5, 2026) The domestic silica industry is becoming increasingly differentiated. Unlike the price hikes of high-end categories, many small and medium-sized precipitated silica producers are being squeezed by rising raw material costs and environmental production restrictions, leading to higher production costs and shrinking profits, further accelerating the industry's reshuffling pace.

In the raw material market, core white carbon black raw materials such as water glass and sulfuric acid have recently seen regional price increases, with procurement costs in East and Central China rising 7%-9% compared to last month. Many small and medium-sized factories lack upstream supporting supply chains and cannot lock in long-term contract raw material prices, resulting in passive increases in production costs. With the current stagnant prices of general white carbon black, gross profit margins continue to shrink, and some small factories choose intermittent production stoppages to reduce burdens. In contrast, leading large-scale enterprises rely on their own silicon ore and supporting chemical production lines, making raw material costs controllable and significantly stronger risk resistance.

Normalized environmental control is another key factor restricting small and medium-sized capacity. Chemical parks across the country have deepened inspections of wastewater and exhaust gas emissions. Silica production wastewater contains high salt content, raising the threshold for tail gas treatment, and small and medium-sized production lines that have not completed environmental technical upgrades have been gradually restricted and rectified. According to industry research data, in June, the operating rate of scattered small workshops and small silica units with an annual output of 10,000 tons was less than 45%, and the pace of eliminating outdated and inefficient capacity exceeded expectations.

On the demand side, traditional downstream markets for footwear, daily-use rubber, and ordinary plastic fillers have entered the off-season. End-product companies are operating sluggishly, orders for generic grades are lacking, market supply is relatively loose, and bargaining power for ordinary silica lies with downstream buyers, making it difficult for manufacturers to pass on the cost pressure from rising raw material prices. In contrast, leading companies are deeply engaged in the silicone rubber, new energy sealing materials, and modified silica for low-rolling resistance tires, relying on customized products to stabilize orders and profits, with strong domestic and international sales orders.

Import and export indirectly reflect changes in the industry landscape: low-end general white carbon dioxide export quotes are being impacted by cheap local production capacity in Southeast Asia, making it harder to secure export orders; Meanwhile, high value-added modified and fumed silica continue to capture overseas markets thanks to their cost-effectiveness, raising the overall average export price of domestic silica. Many foreign trade traders have stated that inquiries about low-end sources continue to decrease, and buyers prefer to connect with large factories with qualifications and stable production capacity.

Industry analysts say that in the short term, there are no obvious signs of decline in raw materials in June, environmental inspections will continue to be routine, and the operational pressure on small and medium-sized white carbon black producers is difficult to ease in the short term. In the future, industry resources will continue to concentrate on leading companies, low-end and outdated production capacity will accelerate its exit from the market, and the trend of the silica industry shifting from extensive mass production to refined customized manufacturing will become increasingly evident.