The price of West Texas sand is expected to drop nearly 20% to ~$30/ton compared with last year, according to Rystad Energy, as the U.S. frack sand industry is swimming in an excess of supply that has battered prices and cut the stocks of sand miners by more than 70% in the last two years.
No. 2 frack sand miner Covia (CVIA +0.2%) has idled 7M tons, the most by any one company tracked by Evercore ISI.
U.S. Silica (SLCA +0.9%), the top frack sand miner in terms of market size, estimated in February that as much as 20% of the 50M tons of northern sand needs to be shut down.
Some miners are finding a market in Argentina, which is seeking to boost production at the Vaca Muerta field; some buyers are paying $240/ton for U.S. sand, far more than the ~$50/ton that U.S. oil companies are paying in the Permian Basin.
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