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In the Permian basin, FOB Kermit 100m prices and 40/70m sand prices have remained within a $0.10 per ton per ton bandwidth each this week. In-basin sand prices have held steady-to-lower amid stable WTI pricing and sand producers pricing their volumes competitively as the frac spread count increases to attract new customers. The PanXchange team expects pricing to be at or near a stable price floor, and for pricing to rise as demand opens up, and domestic supply lags behind due to lack of upstream investment. While WTI prices have increased, the best leading indicator for Permian spot sand pricing continues to be levels of upstream capital expenditures.
Most growers and processors are in harvest now, and so far, yields are coming in better than expected judging from the few early reports we have collected. Naturally, prices have dipped slightly with the expectation of more biomass coming to the market. Most bids for 8%-10% material are in the $1.20-$2.00/lb range ($0.15-$0.20 per point CBD) in Colorado and Kentucky. $2.00 to $3.00 is still possible in states less burdened by oversupply, and trade volumes for crude and isolate have returned to normal after the rumored Delta-8 processor relocation. Therefore, PanXchange stands by its prediction that prices for quality 2021 biomass will rally after harvest. The extent of that rally depends entirely on when stored supplies return to the market.
In the Permian basin, FOB Kermit 100m prices and 40/70m sand prices have remained within a $0.10 per ton per ton bandwidth each this week. In-basin sand prices have held steady-to-lower amid stable WTI pricing and sand producers pricing their volumes competitively as the frac spread count increases to attract new customers. The PanXchange team expects pricing to be at or near a stable price floor, and for pricing to rise as demand opens up, as domestic supply lags behind due to lack of upstream investment. While WTI prices have increased, the best leading indicator for Permian spot sand pricing continues to be levels of upstream capital expenditures.
In the Permian basin, FOB Kermit 100m prices and 40/70m sand prices have decreased by $0.20 per ton per ton each this week. In-basin sand prices have held steady-to-lower amid stable WTI pricing and sand producers pricing their volumes competitively as the frac spread count increases to attract new customers. The PanXchange team expects pricing to be at or near a stable price floor, and for pricing to rise as demand opens up, and domestic supply lags behind due to lack of upstream investment. However, the strong returns shown by companies like Ovintiv and EOG Resources with the integration of their own proprietary in-basin sand mines could pose a significant threat to existing producers despite an increase in proppant demand.
In the Permian basin, FOB Kermit 100m prices and 40/70m sand prices have decreased by $0.25 per ton and $0.35 respectively this week. In-basin sand prices have held steady-to-lower amid stable WTI pricing and sand producers pricing their volumes competitively as the frac spread count increases to attract new customers.