Aggregates Manager Digital Magazine
Issue link: http://read.dmtmag.com/i/581365
17 AGGREGATES MANAGER October 2015 MINE MANAGEMENT move higher volumes. Most of the top five producers have the ability to ship by unit train to the oil field. In July 2015, Unimin set a record for shipping the largest single frac sand rail deliv- ery when it shipped a 140-car train to Elmendorf, Texas. Operations that can ship by barge can access the Pennsyl- vania, West Virginia, and Ohio oil and gas plays by the Ohio River; or can move material on the Mississippi River, supplying terminals in coastal Texas. Texas plants have the advantage to ship in-state, howev- er, the quantity and quality of frac sand needed in the major basins exceeds the production capacity of the Texas mines. Because of the distance from the mines to the oil field within Texas, frac sand is also moved by rail in-state. Frac sand market size and pricing Frac sand comprises 92 percent of proppant used in the United States with a total market size of about 54 million tons of frac sand sold in 2014. In the current low oil price environ- ment, frac sand volume sold is expected to decline by about 15 percent in 2015; however, beginning in 2016 and through 2020, market growth is expected to resume as the number of wells anticipated to supply domestic energy increases and as the price of oil begins to rebound. Frac sand producers have become cautious due to the depressed demand driven by the slump in oil prices. However, each of the top five frac sand producers have indicated plans to grow organically or through acquisition in 2015. Given expected demand for proppant, opportunities exist for new entrants. Opportunities for aggregate producers In 2014, the average price of frac sand was between $50 and $60 per ton. Frac sand and aggregates mining and production have significant overlap, however, the markets they supply have little in common. Aggregate producers would be wise to investigate the potential of developing frac sand mines as long as they invest in a logistics and marketing strategy that matches their opportunity to produce. AM Holly Bellmund is the president of Proppant Today, LLC a research, media, and consulting firm. She can be reached at hbellmund@ proppanttoday.com. Proppant Today has released the US Proppant Market & Forecast Report: 2015 to 2020, available at www. ProppantToday.com. RULMECA MADE BY RULMECA. We strongly believe in continually challenging the status-quo. All of us at Rulmeca are driven to find new and better ways to extend conveyor life and decrease down times. We believe all conveyors can and should run much safer and quieter than they do today. www.rulmeca.ca Moving ahead. CIM_CIM 1/2 HORIZONTAL- 7 x 4.875 1/20/15 8:37 AM Page 1 Rulmeca_AGrm0515_Pg.indd 1 4/20/15 3:34 PM