have become one of the most dynamic products in North American
over the past 10 years, with sales increases outperforming most
other industrial sectors.
During the hydraulic fracturing (fracking) boom-years from
around 2010 to 2012, US proppant use rose dramatically,
reaching 30m s.tons in 2011.
|With no end in sight for the shale energy boom,
demand for the three main proppant types - frac sand,
cermaic and resin-coated varieties (pictured) - is
expected to mushroom in the next five years.
main proppant types: frac sand, ceramic and resin-coated
varieties of both have been used to prop open fractures created
during hydraulic fracturing for years. The first commercial
hydraulic fracturing operation was started in 1847.
Much of the
current demand is for frac sand proppants, which take up 80% of
the current market share, leaving ceramic proppants and
resin-coated proppants with around 10% each.
proppants have become the product of choice for most
manufacturers due to their low-cost and fairly abundant
many deposits of silica sand that meet American Petroleum
Institute (API) specifications for frac sand in the US, yet not
all silica sand can be used for this purpose.
referring to proppant market growth, analysts and market
commentators are most often talking about the frac sand portion
of the market, which has buoyed several producers results
over the past year.
which produces frac sand proppants for the North American
market, highlighted that increased proppant demand was behind
its positive Q2 2013 results.
reported net income of $14.7m, up from $11.8m in the same
period in 2012, and revenue of $27.1m, which has increased from
$20.6m in Q2 2012.
Hi-Crush sold more than 350,000 s.tons frac sand produced
from its Wyeville facility during Q2 2013, with its
recently-signed partner D&I contributing an additional
56,473 s.tons in frac sand sales for the period.
demand growth is set to continue.
customers met or exceeded their contract terms in the second
quarter, and volumes were trending up throughout the quarter as
we transferred contracted tonnes from Augusta and our customers
took advantage of beneficial pricing," said Hi-Crush co-CEO,
combined with our sales under spot arrangements, resulted in
our Wyeville plant operating at almost full capacity for the
quarter and achieving record levels of production in the month
of June. With D&I now integrated into Hi-Crush, we see many
opportunities ahead to increase volumes across our consolidated
company," he added.
specifically about the proppant market, co-CEO Thomas Rasmus
said that Hi-Crush saw an extension of positive proppant trends
from the first quarter, including rising proppant intensity and
a move towards 24-hour operations.
proppants, which can be sand- or ceramic-based, are being
increasingly used in the US due to their ability to increase
proppant pack conductivity, leading to higher oil and gas
Sands, based in Radnor, Pennsylvania, develops resin-coated
sand products for the US market and recently signed a
partnership agreement withE
Proppants, which will extend proppant reach and capacity.
partnership] will involve the manufacturing, distribution and
import and export of resin-coated proppants in the US and
Mexico, Kevin Traynor, executive vice president of
operations, told IM.
our plant in Genoa, Nebraska, which is capable of producing
about 240,000 s.tons per annum resin-coated proppants and E
Proppants manufacturing facility in Mexico has the
capability of producing around 480,000 s.tons per annum
proppants, he added.
explained that the resin-coated section of the US proppant
market currently stands at around 10%, and he doesnt
expect this situation to change much as the market
does however see opportunity in new and emerging markets, but
maintains that North America is likely to remain its largest
I think well see an [expansion]
in the resin-coated proppant market for outside of the US in
emerging markets like Mexico and Central America. Thats
where I think well see the future growth
opportunities, Traynor explained.
I dont think well see the
explosive growth that weve seen over the past five or
seven years; I think well see more normalised growth in
that marketplace, he added.
proppants have maintained their 10% share of the US proppant
market despite the fact that they make up the most conductive
for this is cost. Comprised most often of calcined bauxite,
calcined kaolin or a mixture of both, ceramic proppants are
simply far more expensive to produce than their sand-based
proppants do hold other advantages over frac sand, however, and
are often used by customers who are drilling deeper wells.
minerals conglomerate Imerys entered into the ceramic proppant
market in earnest after acquiring manufacturer PyraMax Ceramics
LLC in April this year.
Imerysinvested $235m in the company, which has the
potential to be increased by the end of 2014, although
additional investment will not to exceed $100m, the
IM earlier this year.
interest in non-conventional deposits is opening up global
prospects for the oilfield minerals market, which was already
growing in the USA. By investing in this new industrial
complex, Imerys has reached a significant step in the
implementation of its internal growth strategy by 2016,
Gilles Michel, Imerys CEO, said.
2013 results reflected the investment, with Michel arguing that
the US ceramic proppants market was underserved and
proppantsis a booming sector in the
US, he said. We see the price of proppants
getting stronger and stable on the American market and this is
good news for us.
We will be ramping up
[ceramic proppant manufacturing] in 2014. We are in line with
our plan (...) we are penetrating a growing
Michel added that the move
to invest in the oilfield minerals market, and specifically
ceramic proppants, was because the American market was being
served by product from China.
not the market share for each type of proppant is set to change
in future, there is no doubt that the demand for all three will
continue to grow in line with hydraulic fracturing
has grown from 2011 levels to around 35m s.tons, according to
Preferred Sands, and while growth is
expected to slow somewhat in the coming years double digit
gains are still expected.
the latest research report from Freedonia, overall
demand is expected to grow from around 35m s.tons today to over
45m s.tons in 2017.
is expected to be worth more than $10bn in four years