Silica Prices Explained

Silica prices posted different trends as demand and supply varied across regions. In North America, the market maintained a positive outlook as the construction sector (particularly non-residential projects) showed resilience in demand.

In Asia (despite Chinese economic uncertainties and a sluggish real estate market), the region sustained a stable silica market because of consistent supply levels and steady demand from various industries, like the manufacturing and construction sectors. 

The region reflected a cautious yet steady market sentiment. However, experts are hopeful for a market comeback as the Chinese government-owned bank expressed renewed support for its real estate projects. 

Seasonal demands and supply chain issues, particularly container shortages in Asia that led to elevated freight costs keep the Middle Eastern silica prices modest. 

The ongoing downturn in the eurozone construction sector reduced the demand for silica in Europe. Decreased construction activities in Germany, France, and Italy (due to low official economic indicators) contributed to declining silica prices in the region.

Why are silica prices fluctuating?

1. Glass Industry

Silica is the main component of glass production. Thus, this sector is a major contributor to the commodity’s price fluctuation. This industry particularly uses SiO2 for glass production because of its extreme thermal shock resistance and low coefficient of thermal expansion, preventing any changes in the material when there are sudden temperature fluctuations.

Additionally, silica provides excellent optical transmission characteristics from ultraviolet to infrared (making it important in laboratory equipment). The global industry reported increased inquiries for glass-made products because of rising consumer preferences for glass packaging and construction materials.

2. Solar Panel Industry

Silica sand is a foundational material in solar panel manufacturing. The inclusion of this commodity in its production produces high-quality solar cells and contributes to the expansion and development of the solar industry.

The solar panel sector in the U.S. experienced an average annual growth rate of 24% as solar energy accounts for 48% of the new electric capacity systems in the country. Also, nearly 30% of new behind-the-meter solar systems will be paired with storage. Thus, the silica market largely benefits from the growth of the industry.

3. Construction Industry

The construction industry contributes 58% of silica market value as this sector utilizes this commodity in most applications. For instance, silica is used in flooring, mortars, cement, roofing shingles, and other industrial materials.

While the market has a solid presence in North America and Europe, the Asian region is starting to be the dominant market for silica consumption. The growing real estate in India (estimated to reach $1 trillion by 2030) and the key construction projects in China will support the fluctuating silica prices.

4. Hydraulic Fracturing

The demand for silica in hydraulic fracturing (fracking) is a promising segmented market due to the increasing global energy needs and the continuous exploration of unconventional oil and gas reserves.

Silica’s high strength and resistance to crushing properties make it an ideal choice for fracking operations. Additionally, advancements in fracking technology and the discovery of new shale formations fuel the need for this commodity.

The United States, Canada, and China are the leading producers and consumers of silica sand as they invest heavily in oil explorations to support and cover their depleting fuel reserves. Thus, this innovation provides a profitable segmented market of silica.

Which variables impact the price of silica?

• Glass Industry
• Solar Panel Industry
• Construction Industry
• Hydraulic Fracturing

Where does silica come from?

Silica is one of the most abundant minerals on Earth, making up about 59% of the Earth’s crust. It is commonly found as quartz in various forms such as sand, clay, and rocks. The production of silica involves mining and processing quartz-rich stones and sand.

The mined silica is crushed, washed, and graded to produce different sizes and qualities suitable for various applications like glassmaking, construction, and hydraulic fracturing.

Thanks to its vast quartz reserves and well-developed mining infrastructure, China is the number one producer. Russia and Brazil have significant silica production capabilities due to their large mineral resources and industrial activities. Norway and the United States are notable producers as well, with advanced technologies and efficient production processes.

What are the uses of silica?

Silica is popular in construction because of its extensive application in the industry. However, this commodity has more to offer to other industries.

1. Construction and Building Materials – When added to concrete, silica improves mechanical properties such as compressive strength, resistance to abrasion, and impermeability. This makes the concrete mix denser and more solid, crucial for structures exposed to harsh environmental conditions, like bridges and highways.

2. Glass Manufacturing – Silica is the primary raw material of glass. It is used to produce high-performance glass for architectural, automotive, and specialty glass in electronic industries. Its high purity and sharp distribution of particle size guarantee superior optical clarity, thermal stability, and mechanical strength.

3. Electronics and Semiconductors – It is indispensable in the electronics industry for producing semiconductors, integrated circuits (ICs), and other electronic components. Also, it is the chief raw material for making silicon wafers, which are fundamental substrates in the semiconductor industry.

4. Ceramics and Refractories – Due to its high melting point and resistance to thermal shock, it is used in making ceramics and refractory materials. These are essential for applications requiring high-temperature resistance, such as kiln linings, furnace bricks, and crucibles.

5. Personal Care and Cosmetics – Silica acts as an abrasive in toothpaste to help remove plaque and stains. Also, it is a thickening agent in deodorants and skin care products to improve texture and consistency.

What is the future price of silica?

The silica market heavily leans on the fluctuating demand from the construction industry. While its profitability rests on modest levels on some regional markets, easing monetary policies and increased government infrastructure projects from developing countries provide an uptick in its trend.

Also, the commodity registered increased purchases from industries that use it in numerous applications. Various industry reports showed growth in demand for silica wafers and fumed silica from the automotive, chemical, pharmaceutical, and rubber sectors.

The automotive industry’s shift towards electric and autonomous vehicles boosts the need for high-quality electronic components. Toyota and BMW are investing in these technologies to enhance vehicle performance and safety.

In the chemical industry, fumed silica is widely used as a thickening agent, desiccant, and anti-caking agent in paints, coatings, and adhesives. BASF and Evonik Industries leverage these properties to improve product quality and efficiency. The pharmaceutical industry uses silica for tablet manufacturing and as a chemical excipient, with Pfizer and Novartis incorporating it into their production processes.

Lastly, the rubber industry uses it to enhance the properties of rubber compounds, making them more durable and heat-resistant. Goodyear and Michelin are incorporating silica into their tire manufacturing processes to improve performance and safety.

Overall, current and emerging applications from several industries made a distributive market profitability of silica. Experts projected a bullish $23.70 billion market by 2032, with a price of $304.56 per ton.