Frac Sand Newsletter 01-14-19

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01/14/19

This week was by far the strongest week over week movement in Kermit pricing since PanXchange began tracking pricing, which is encouraging given the overall negative tone in the market. We believe the jump in pricing is driven largely by the supply side of the market; however, some cyclical demand factors do come into play.

The supply side of the market has already responded to lower demand over the past few weeks as a majority of plants are only running a single dryer and are not even close to full utilization. Implied available supply to the spot market has been cut significantly with spot market demand remaining rather quiet. In addition to dry plants being underutilized, power supply has been an issue over the last week, with multiple facilities reporting sporadic power outages throughout the Permian. While on a tour of the basin last week, we noticed significantly fewer trucks on the road and most notable were the short lines at virtually every frac sand plant we saw…

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