• Frack sand miners plunged in yesterday’s trading, as investors worried about a possible glut of the special sand after a major supplier announced construction of a major new plant in the Permian Basin that would use regional sand
  • On Thursday, privately held Unimin Corp., the third largest frack sand supplier by capacity, said the new mine could produce 5M tons/year beginning early in 2018; most of the sand supplied to west Texas oil producers currently comes from mines in Wisconsin and Illinois.
  • “Investors are looking at all the new mine capacity in the Permian and that threatens the pricing outlook for sand from existing companies” located farther away, says Jefferies oilfield services analyst Brad Handler.
  • U.S. sand mining capacity currently totals ~85M tons, but Handler estimates producers will need 100M tons in 2018, adding that “investors are fearing that this onslaught of supply and lower than expected oil prices will leave demand a lot less than 100M tons.

 

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