Status and Outlook for Precipitated Silica Market in China   

By Li Bingyan, China Rubber Group Carbon Black Research & Design Institute

Precipitated silica, also called precipitated white black carbon, is an important reinforcement material in the rubber industry and is also used in pesticides, animal feeds, toothpaste, coatings, plastics and paper. In 2010, China's output of precipitated silica reached 934 000 tons, ranking first in the world, and it will continue to grow with the development of China's economy, particularly the automotive and tire industries.

1  Capacity and output grew fast

From 2001 to 2010, with the rapid development of China's rubber, pesticide, feed and toothpaste industries, the nation's precipitated silica production capacity grew from 350 000 tons to 1.27 million tons, with an average annual growth rate of 15.4%; and its output increased from 219 000 tons to 934 000 tons, an average annual growth of 17.5% (see Figure 1).
   In 2010, there were 62 precipitated silica manufacturers in China, seven of which had a capacity of more than 50 000 t/a and a combined capacity of 537 000 t/a, accounting for 42.2% of the national total, as shown in Table 1. The manufacturers are mainly distributed in eastern and south-central regions, especially in Fujian, Shandong, Jiangsu and Hunan provinces.

Table 1 Major producers of precipitated silica in China in 2010
Producer    Capacity (kt/a)    Share (%)    Remarks
Rhodia (China) Investment Co Ltd    112    8.8    Including plants in Qingdao and Chengyang
Zhuzhou Xinglong Chemical Industrial Co Ltd    100    7.9
Evonik Wellink Silica (Nanping) Co Ltd    90    7.1
Zhangping Chemical Co Ltd    65    5.1    Including Zhengchang, Zhengsheng and Saijiyuan plants
Shandong Link Silica Co Ltd    65    5.1
Puyang Yongan Chemical Co Ltd    55    4.3    Including Fengyuan and Fengrun plants
Wuxi Quechen Silicon Chemical Co Ltd     50    3.9
Subtotal    537    42.2
17 producers each with a capacity of 20 to 50 kt/a    444    35.0    
18 producers each with a capacity of 10 to 20 kt/a    219    17.2    
10 producers each with a capacity of 5 to 10 kt/a    53    4.2    
9 producers each with a capacity of less than 5 kt/a    22    1.7    
Total    1270    100


2  Exports increased rapidly

Since 2000, China's export volume of silica (including precipitated silica and fumed silica) has gradually increased. But export tax rebate for silica was eliminated in 2008, the export volume dropped significantly in that year. For 2009, the rebate was increased to 9%. As a result, 303 000 tons of silica was exported that year, up 56.2% year on year (y/y). Then, in 2010, it reached 375 000 tons, up 23.8% y/y, as shown in Table 2.

Table 2  Imports and exports of silica (including precipitated silica and fumed silica) in China from 2001 to 2010
Year    Import volume (kt)    Export volume (kt)    Average import price (US$/t)                         Average export price (US$/t)    Import price / export price ratio                                                                                                                                    
2001    32    64    1739    693    0.40
2001    32    66    1875    660    0.35
2002    41    82    1894    577    0.30
2003    53    105    1924    503    0.26
2004    69    126    1897    481    0.25
2005    72    151    1868    515    0.28
2006    81    307    1880    442    0.24
2007    97    281    1830    461    0.25
2008    93    194    1999    604    0.30
2009    81    303    2108    569    0.27
2010    100    375    2301    756    0.33

   China is a net exporter of silica. In 2010, its export volume of precipitated silica was 3.75 times its import volume, but its export value was only 1.23 times its import value, so the import and export price ratio was 0.33. This is mainly because the imports were mostly fumed silica, which is costly, and other high-value-added silica, while the exports were cheap precipitated silica and other even cheaper silica products. This also indicates that China's overall silica product structure is still unreasonable.
   It is estimated that precipitated silica accounts for about 2/3 of China's silica exports by volume. Thus, China's export volume of precipitated silica in 2010 was about 250 000 tons. Taking into account the small amount of fumed silica exported, the domestic apparent consumption of precipitated silica was about 730 000 tons.

3  Capacity continues to grow

In recent years, China's precipitated silica industry has developed rapidly. Existing domestic producers are expanding their capacity, and foreign manufacturers have subsequently set up wholly-owned or joint-venture precipitated silica plants in China. For example, PPG set up a plant in Nanchang, Jiangxi province; Evonik Degussa built a plant in Nanping, Fujian province; Rhodia established a plant in Qingdao, Shandong province; and Glassven set up a plant in Yangzhou, Jiangsu province. In the past, due to low barriers to entry into the industry, many private enterprises in Fujian, Sh