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This Week’s Market Buzz

  • According to the latest PacWest Consulting Partners ProppantIQ market study, North America proppant consumption is expected to increase at 23 percent per annum through 2016, from 80 billion lb. in 2013 to 153 billion lb. in 2016, with much of the growth occurring in frac sand consumption. Growth in proppant consumption is driven by an increasing number of horizontal wells fracked and increased proppant intensity (i.e. increased mass/well).The RCS and Ceramic markets will both grow at 9 percent and 2 percent per annum, respectively. Supply of all proppant types is expected to increase moderately through 2016, after substantial capacity increases between 2011 and 2013. Logistics will be challenging into the next few years, causing significant price increases at the well pad. This is due to shortages in railcars, built-for-purpose frac sand truck trailers and other factors. However, there should be improvement by 2015.
  • The Winneshiek County, Iowa, Board of Supervisors has extended a moratorium on frac sand mining until October of 2015. At a recent meeting, the board made the motion in order to give the Iowa Initiative for Sustainable Communities enough time to finish and compile the results of several studies it has contracted with the county to complete. The original 18-month moratorium on the issuance of any conditional use permits for frac sand mining was due to expire Dec. 3, according to the Decorah Journal.
  • Carbo Ceramics expects ceramic proppant sales to take a hit as drillers try new techniques that require sand proppants. The company also noted increased price competition on ceramic proppant sales from domestic and international manufacturers, especially in the Bakken play. "We plan to manage the current competitive pricing environment, caused by proppant oversupply, by focusing on sales volumes and introducing new technologies," CEO Gary Kolstad said in a statement. Some Carbo clients are also seeing delays with well completion, pushing some sales the company expected to make in September to later in the year. The company sees third-quarter ceramic proppant sales volumes of 375 million lb., similar to first-quarter sales, as demand for frac sand rises.