Following the 22nd of last month, silica prices down 600-800 yuan, the domestic precipitation method silica downward channel officially opened. Recently, in the market it is again rumored that silica manufacturers plan to cut prices, and the price reduction range will be more than 500 yuan per ton.

According to the observation of Carbon Black Industry Network, the main reason why precipitated silica prices fell again within a short period of time is still the lack of demand and cost reductions in two aspects.

Recently, the raw materials of silica, sulfuric acid and soda ash prices have dropped again and again, and now compared with the high level, soda ash has been reduced by nearly 1,000 yuan, and sulfuric acid has been reduced by nearly 300 yuan; in addition, coal prices have also been reduced by nearly 700 yuan, and the cost of precipitated silica has fallen back significantly.

In terms of supply and demand, the price of carbon black and other raw materials rose last month, the rubber products enterprises was suffering from a high cost of raw materials, while the overall low operating rate of enterprises, and the demand support for silica was insufficient. In addition, the recent stable production of silica, sufficient supply in the market and high inventory of manufacturers put great pressure on silica manufacturers to deliver near the end of the year.

To sum up, in the short term, the domestic silica market is dominated by negative factors, the upstream soda ash inventory continues to rise high, soda ash futures have reached near 2300 yuan, the future cost of silica continue to fall more likely. The downstream rubber products enterprises' production in the year end is difficult to improve. Users have a strong wait-and-see mood under the mentality of buying up or not buying down. Carbon Black Industry Network predicts that in the short term, precipitation method silica downward trend is difficult to change.