Frac Sand Prices Forecast to Remain Flat Through 2024

May 29, 2019

2 Min Read
Frac Sand Prices Forecast to Remain Flat Through 2024
A new report forecasts that prices for frac sand will remain flat in the U.S. through 2024. Image courtesy of Pixabay

Although demand for frac sand is expected to increase in the U.S. hydraulic fracturing market through 2024, prices for Northern White and Permian proppant sand are forecast to remain more or less flat over the next five years, according to a new report released this month by Rystad Energy.

The energy research and business intelligence company’s latest Proppant Market Report posits that prices for Northern White sand will bounce between $20/ton to $25/ton from 2019 to 2024. Prices for in-basin Permian sand from West Texas are projected to range from $19/ton to $23/ton during the same period.

In 2018, one ton of Northern White sand sold for $34, while one ton of Permian sand went for $35. The report’s authors note that frac sand prices “have been under pressure for some time thanks to oversupply in the market.”

Rystad Energy predicts that frac sand supply in the U.S. will grow by 10% this year and then dip by 2% in 2020 as operators shift away from Northern White sand. On the other hand, demand for the material is forecast to experience an uptick of 10% in 2019 and 17% in 2020. By 2024, supply is estimated to reach 239 million tons and demand is projected to hit 181 million tons. 

“Adoption rates for in-basin sand in Eagle Ford will determine the future of Northern White sand. Lower quality, in-basin sand found in Eagle Ford may not be widely adopted due to higher downhole pressures found in that basin,” said Rystad Energy Senior Analyst Thomas Jacob in a statement. 

A major takeaway from the report is that researchers expect industry to pivot away from use of Northern White sand in their operations in the coming years. Rystad Energy forecasts that Permian sand demand will grow from 55 million tons in 2019 to 85 million tons by 2024. The authors also opine that 35% to 40% of the supply of Northern White sand will come off the market by next year. The Eagle Ford Basin in south Texas is described in the report as a “key market to watch” in the proppant sand industry. 

“In-basin sand mines in Eagle Ford have struggled to reach desired utilization levels in recent months, but we expect this issue to be solved in the near term,” Jacob said. 

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