Sellers report a cautious recovery in frac sand demand

By William Clarke
Published: Friday, 22 February 2019

Three newly launched frac sand prices show emerging optimism among miners of the proppant.

Franc sand demand is reported to be strengthening slightly, Fastmarkets IM found in its first assessment of the fine mesh frac sand market.

Sellers appear to be cautiously optimistic, suggesting recovering demand and the closure of a couple of mines was bringing the market back into balance after a supply glut in the second half of 2018.

Demand for frac sand had been suppressed by a sluggish oil market last year while a shortage of pipeline capacity and rising logistics costs make fracking in the Texan Permian basin less profitable.

But one buyer said he was "not expecting prices to go back to [early 2018 levels] any time soon.

Fastmarkets IM assessed the price of Northern white frac sand, 20/40 mesh, API, ex-works Wisconsin, at $20-25 per short ton on Thursday February 21, up from $18-25 a month earlier.

Fastmarkets' newly launched Northern white frac sand, 100 mesh, API, ex-works Wisconsin price stood at $25-30 per short ton on the same day, reflecting high demand for fine mesh frac sand.

Frac sand buyers have increasingly favored fine mesh sand over coarser grains, a reversal of market trends five years ago, when coarse sand was believed to give better results.  

The Northern white frac sand, 40/70 mesh, API, ex-works Wisconsin price was at parity with the fine mesh material at $25-30 per short, although once seller reported that prices for that grade were slightly below those for 100 mesh.

And in the last of the three newly launched prices, Fastmarkets IM assessed the price of northernwhite frac sand, 30/50 mesh, API, ex-works Wisconsin, at $20-25 per short ton.

Fastmarkets launched the new frac sand prices to better reflect the growing market for proppants in the United States. The new prices take in the full range of mesh sizes used in US fracking.

For additional detail on the reasons for launching these prices, click here.



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