The sponge industry will undergo a reshuffle in 2026, with digitalization and greening becoming the core competitive advantages.

A recent industry research report indicates that in 2026 and the next five years, China's sponge industry is at a critical juncture, transitioning from extensive scale expansion to high-quality development. The industry landscape will undergo profound reshaping, with digital intelligent manufacturing and green environmental protection technologies becoming core competitive advantages for enterprises' survival and development. Low-end and outdated production capacity will be rapidly eliminated.

The report points out that in 2026, the nominal total production capacity of the domestic sponge industry will remain at 4.85 million tons, but the industry's compliance threshold will be significantly raised. The proportion of green and intelligent production capacity complying with EU REACH regulations and the latest domestic VOCs emission standards must be mandated to increase to 68%. It is estimated that approximately 1.5 million tons of low-end production capacity relying on manual experience and insufficient environmental protection investment will be completely eliminated, locking in an effective competitive capacity of around 3.3 million tons. At the same time, industry concentration will continue to increase, with the CR5 (market share of the top 5 companies) rapidly climbing from 28% in 2023 to 42.5%. Over the next five years, an oligopolistic structure dominated by leading companies possessing core technologies will gradually form.

From the perspective of industry transformation practices, leading companies have already taken the lead in embarking on the path of digital and green upgrades. A leading enterprise in the Yangtze River Delta region launched its "Smart Sponge 4.0" strategy, investing 480 million yuan in R&D to build a closed-loop control system based on IoT big data. This resulted in a 34.6% reduction in energy consumption per unit of output, an increase in raw material utilization to 98.2%, a reduction in customer order delivery cycle from 15 days to 7 days, and a gross profit margin maintained above 25%. A benchmark enterprise in South China focused on the high-end medical field, developing a new non-isocyanate polyurethane (NIPU) foaming technology that eliminates toxic residues from traditional processes. Its products have obtained EU CE certification and US FDA registration, and the revenue share of high-value-added medical-grade products has increased to 47%.

The market demand structure has also undergone a fundamental transformation. The demand share of traditional building insulation and low-end packaging has compressed from 45% to 28%, while the demand share of emerging high-value-added scenarios such as lightweight cushioning for new energy vehicles, precision components for humanoid robots, and biomedical tissue scaffolds has exceeded 35%. Among these, the medical-grade sponge market is expected to become the core profit engine of the industry with a compound annual growth rate of 34.8%. Industry insiders say that only companies that adhere to technological innovation, strictly abide by environmental protection standards, and focus on high-end applications will be able to weather industry cycles and share the benefits of high-quality development.