A Hot Commodity Once Again
By Tom Butcher, Associate Director, VanEck
Fracking sand is, once again, a hot commodity. While production has dropped over the past several years, both demand and prices have been rising recently, with some believing that prices could hit $50 a ton by the end of 2017.1)
Using industrial terminology, fracking sand is a "proppant." Basically, proppants "prop", or keep open, the cracks and pores in the rock after it has been fractured ("fracked") so that the oil, gas, and natural gas liquids can be pumped out.2)
U.S. Sand & Gravel Production Usage - Fracking, Well-Packing, and Cementing Sand
Source: usgs.com (*Estimated)
The last time fracking sand was in such demand and prices were high was before the price of crude oil started to go South in the second half of 2014. Prior to that, in some instances prices rose to an average of $75 (sometimes more) per metric ton.
Fracking sand may, once again, be a hot commodity. But its price is also, once again, a concern of energy companies in the U.S.
About the Author:
Tom Butcher is an Associate Director at VanEck. Formerly an independent writer, researcher, and consultant focusing, amongst other things, on strategic materials, in particular metals, Mr Butcher has 38 years of experience in finance. He has lectured and spoken at conferences around the world. Amongst other things, he writes the “Letter from North America” in the Minor Metals Trade Association's publication The Crucible, and was lead author of a chapter on gallium in the British Geological Survey's Critical Metals Handbook.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.