A wave of mine closures, bankruptcies and
leadership struggles has spread through the United States' frac
sand market over the summer, while producers struggle with a
glut of oversupply that is keeping prices low.
Frac sand prices nosedived in late 2018
after a huge volume of new supply came online. Prices have
remained stagnant since then, even while demand rises.
Fastmarkets’ latest monthly
assessment of the price of Northern White frac sand, 40/70
mesh, API, ex-works Wisconsin was $29-34 per short ton on
August 15, up from $25-30 per short ton at the start of the
year, but below the levels in mid-2018 before Fastmarkets began
In July, Emerge Energy Services, which
mines frac sand through its subsidiary Superior Silica Sands,
filed for Chapter 11 bankruptcy.
According to documents filed at the time,
the company has already idled facilities at its Auburn, New
Auburn, Arland and LP facilities in Wisconsin. The company has
a total frac sand mining and processing capacity of 26 million
short tons per year.
A company in Chapter 11 bankruptcy can
continue to operate, but must submit a proposal to reorganize
and repay its debts, overseen by a bankruptcy court.
In August, another US-based producer Shale
Support announced it would also file for Chapter 11. Shale
Support has a total frac sand capacity of 5 million short tons
and has operations in Oklahoma, West Virginia, Louisiana,
Pennsylvania and Ohio.
Also in August, the sand miner and
logistics company Hi-Crush announced it was mothballing its
production facility in Whitehall,
Wisconsin, US, which has 2.8 million short tpy of
"We are hopeful that the layoff is
temporary but the duration is presently unknown," Hi-Crush
said, adding that any improvement is not expected in the
Another US-based miner, Select Sands, had
been facing a shareholder rebellion led by its former chief
Rasool Mohammed resigned from his COO
position in July, claiming that the company, "will run out of
money before the year’s end." Mohammed then led a
group of shareholders who were demanding a change in the
On August 9, Select Sands management
countered that, "Current management have significant industry
experience and relationships, have been reducing costs during
the industry downturn and continue to actively seek
opportunities to strengthen the company. Although management
recognizes this has been a difficult period given industry-wide
conditions, management has a plan for the company and the
experience to execute on the plan."
Select Sand management retained control of
the board in a shareholder meeting on August 15, with chief
executive Zigurds Vitols retaining his seat.