Soft oil price topples frac sand
Prices for hydraulic fracturing (fracking)-grade
silica sand (frac sand) are tumbling in the wake of the
pullback in oil drilling activity, as proppants look set to be
hardest hit of all oilfield minerals.
North American sources recently told
IM that frac sand producers are suffering from
falling prices in the spot market.
"Frac sand is particularly hard hit right now
(…) a lot of current drilled wells are not being
completed," one source said.
In the US, a large number of wells that have
already been drilled are yet to be fracked, as oil and gas
companies hold off in the face of low oil prices. These are
currently around $60/barrel (bbl), down from a peak of $120/bbl
in June last year, but up from the $45/bbl low point seen in
Frac sand prices had shown some resilience to the
declining oil price, thanks partly to long term contracts that
locked in selling values and meant there was less material on
the spot market.
The mineral also benefitted to some degree from
increased proppant loading and the shunning of more expensive
resin-coated or ceramic proppants by oilfield companies, who
opted for cheaper frac sand when lower hydrocarbons prices
began to put pressure on margins.
Recently, the oilfield trading website,
DownHoleTrader, said that ceramic proppant suppliers
were having fire sales in order to shift products at prices
close to those of frac sand.
"There may soon be a trend of buyers pursuing
ceramics offered in fire sales," DownHoleTrader said.
"Securing ceramics under market value (in some cases closer to
sand prices) could provide significant value for drillers."
Ceramic proppants, typically made from sintered
bauxite or kaolin, are usually more expensive than frac sand
but offer more efficient oil and gas extraction in deeper
Northern White frac sand, one of the best quality
frac sands available in the US market, is currently priced at
$65-75/s.ton on internet trading boards.
"Since the high production life of an
unconventional is relatively short, I expect frac sand demand
will bounce back in the fourth quarter or so, but probably not
at the levels seen last year," a source said.
Bentonite prices expected to ride out oil price
Bentonite producers are continuing to stand firm
on pricing, despite repeated requests for discounts from
oilfield customers, industry participants told
IM in May.
Prices for the smectite clay, which is used in
oil well drilling, iron ore pelletisation (IOP), cat litter and
a range of other end-markets, remain within
IM’s published ranges as
suppliers refuse to budge over offers.
Market sources said that they expect the
bentonite market to ride out the present volatility
in the oil market, which has seen the price of oil halve in
the last 12 months.
"The oilfield [market] has always been cyclical
and the minerals side always seems to ride out the storm," one
North American source told IM.
Part of the reason for bentonite’s
resilience is its relatively diverse application base, compared
with other oilfield minerals like frac sand and barite
(barytes), where almost all production goes into the oilfield
"On the bentonite end, oilfield usage is not the
business driver it once was. Now it is cat litter," the source
Producers of sodium-based bentonite in southeast
Europe also told IM that prices were stable
and unlikely to weaken.
"We only produce high quality material, so we
have very little flexibility on price," said one supplier,
whose customers number oilfield and speciality organoclay
producers in the Middle East and North Africa and northwest
Last month, one buyer told
IM that although it did not expect bentonite
to become cheaper this year, sales volumes could come down in
the oilfield market, which may put pressure on prices for API
"Contrary to buyers’ beliefs (...)
there is much blood left to squeeze from [the] bentonite
turnip," one source said. "It is not and never has been a
business blessed with tremendous profitability. This
particularly true for Wyoming bentonite."
Bentonite, API grade, bagged,
rail car, ex-works, Wyoming, $/s.ton
Bentonite, cat litter grade 1-5mm, bulk,
FOB main European port, tonne €42-60
Bentonite, cat litter grade, crushed,
dried and loose in bulk, FOB Kandla, India, tonne
Bentonite, rail hopper cars, crude, bulk
(all grades), ex-works Wyoming, US, s.ton
Bentonite, IOP grade, crude, bulk,
ex-works Wyoming, s.ton $68-72
Bentonite, Indian, FOB Kandla, crushed
and dried, loose in bulk, Civil Engineering grade,
Bentonite, Indian, FOB Kandla, crushed
and dried, loose in bulk, Iron ore pelletising grade,
Bentonite, cat litter grade, ex-works
Wyoming, US, s.ton $52-65
Bentonite OCMA/Foundry grades crude and
dried, bulk, FOB Milos, tonne €60-80
Bentonite, foundry grade, bagged, rail
cars, ex-works Wyoming, s.ton $97-124
Bentonite, API grade, bagged, rail car,
ex-works, Wyoming, s.ton $95-135
full price listing will now only be published online at
If you have any comments or concerns, or wish to discuss any of
the grades or prices listed, please contact
Laura Syrett, Prices Editor, at
Bold indicates a price change from the
previous month (it may have changed more than once during the
month). All prices are listed in US$ and quoted per tonne