After a period of volatility, the global silicon carbide (SiC) raw material market has entered a price downward cycle, bringing much-needed relief to superhard abrasive enterprises that have long been plagued by high cost pressure. According to the latest data from Mysteel, the average global price of silicon carbide raw materials has dropped by 18% year-on-year as of the fourth quarter of 2025, with the Chinese domestic market price falling to around 6,500 yuan per ton, a significant decrease from the peak of 8,200 yuan per ton in 2024. This trend is expected to continue into the first half of 2026, providing favorable conditions for the high-quality development of the superhard abrasive industry.
Silicon carbide, as a core raw material for superhard abrasives, accounts for 35% to 45% of the production cost of superhard abrasive tools. Since 2023, affected by factors such as tight supply of upstream raw materials and booming demand from downstream new energy industries, silicon carbide prices have remained high, putting tremendous operational pressure on superhard abrasive enterprises, especially small and medium-sized ones. Many enterprises have been forced to reduce production capacity or compress profit margins, which has hindered the industry's technological innovation and upgrading process.
The recent price drop of silicon carbide raw materials is mainly driven by the adjustment of market supply and demand. On the supply side, Chinese silicon carbide manufacturers represented by Tianyue Advanced have achieved breakthroughs in production capacity expansion, with the global effective production capacity of silicon carbide wafers surging from 460,000 pieces (equivalent to 6-inch) in 2022 to 3.9 million pieces in 2025, fundamentally alleviating the supply shortage. On the demand side, after the previous period of rapid growth, the downstream market has entered a destocking cycle, and the growth rate of demand has slowed down, leading to a gradual balance between supply and demand and a rational return of prices.
Superhard abrasive enterprises have clearly felt the positive impact of the price drop. A leading superhard abrasive manufacturer in Henan Province stated that the decrease in silicon carbide raw material prices has reduced the company's production costs by about 12%, and the gross profit margin of core products has increased by 3 to 5 percentage points. "We have resumed full-capacity production and increased investment in R&D of high-precision abrasive tools," said the company's operation director. Data from the China Abrasives and Grinding Materials Industry Association shows that in the third quarter of 2025, the overall profit margin of China's superhard abrasive industry reached 8.7%, an increase of 2.1 percentage points year-on-year.
Industry experts pointed out that the fall in silicon carbide prices will help optimize the industrial structure of the superhard abrasive industry. "Low-cost raw materials will accelerate the elimination of backward production capacity and encourage enterprises to shift from cost competition to technological competition," said an analyst from TrendForce. With the relief of cost pressure, enterprises are more willing to invest in the R&D of high-value-added products such as semiconductor-grade superhard abrasives, which will promote the upgrading of the entire industry.
Looking ahead, as the supply capacity of silicon carbide raw materials continues to improve and the demand from downstream industries such as new energy vehicles and semiconductors gradually rebounds, the global silicon carbide market is expected to maintain a stable operation. Superhard abrasive enterprises are actively seizing this opportunity to strengthen supply chain management and technological innovation, aiming to enhance their international competitiveness in the high-end market.
