Fracking Proppants Market Overview
The demand market for fracking proppants is expected to reach $10.10 billion while growing at a continuous CAGR of 6.44 percent until 2022. The capacity of the global proppants market is expected to grow from 89.03 MMT to 114 MMT until 2022. North America constitutes approximately 78 percent of the global proppants market and is anticipated to grow due to the increase in shale activities in the U.S. and Canada. The APAC accounts for around 17 percent of the global proppants market, and is expected to witness further growth due to a large number of upcoming hydraulic manufacturing projects in China and Australia, and also due to shale gas extraction projects.
The report also provides an overall market outlook of fracking proppants in regions such as North America and the APAC. This followed by a study of significant growth drivers such as an increase in production from unconventional fields, increase in demand for well completion, increase in crude oil price, environmental regulations, and lower profit margins. The report also provides Porter's five forces analysis for the frac sand market in the U.S., followed by a detailed cost break up frac sand, ceramic & resin coated proppants.
The global proppant market is slightly fragmented with many local players. With lower, but stable crude prices since Q3 2018, the proppant suppliers may not be able to negotiate better deals. The high-volume purchase, and long-term relationships with suppliers established by service companies will act as constraints for an E&P company to source proppants directly. There is no visible threat to this industry, as there has been no substitute for fracking proppants developed until today.
Bauxite is the major raw material for ceramic proppants, which contributes ~60 percent of the entire cost. The process costs ~30 percent of the entire cost, which includes plant set-up cost, labor cost, machinery, electricity, etc. The miscellaneous/indirect cost is around 15 percent. The cost per ton is affected greatly by the cost of transporting and storage.
Beroe gathers intelligence through primary sources that include industry experts, researchers, and consultants, as well as current suppliers, producers and distributors. Secondary sources can include business journals, newsletters, magazines, market research data, company sources, and industry associations. Following data collation, analysis, and strategic review, the Final Research Report is published on Beroe LiVE.
Fracking Proppants Market Trends
Category Intelligence on Fracking Proppants covers the following
- Information relating to market, supply, cost, and pricing analysis
- Hard to find data on cost and TCO models, supplier details, and performance benchmarks
- Macroeconomic and regional trends impacting cost, supply, and other market dynamics
- Category-specific negotiation and sourcing advice
Industry Outlook & Drivers
Global Proppants Market Outlook
- The fracking proppants demand market is expected to be $7.87 billion in 2018, and it is expected to reach $ 10.10 billion in 2022, with a CAGR of 6.44 percent
- Increase in demand for well completion in North America is seen as the key demand driver
- Major Proppants Market Drivers: Improving fracking technology, increase in demand for well completion, government policies on coal to gas switch.
- Top Proppant Suppliers: North America – U.S. Silica, Hi-Crush, BMC, APAC - China Ceramics, Unimin Corporation, Yixing Orient Co Ltd. ROW - Fores, Hexion Inc., Carbo Cermaics.
- Impactful fracking proppants cost components: Raw materials ranging from 50 to 60 percent. Logistics ranging from 60 to 65 percent. Processing ranging from 25 to 45 percent. Key Raw Materials: Bauxite 50–55 percent.
- Global proppant market size: 111.9 million tons in 2019 (E) and expected to grow at a CAGR of 6 percent to 132.7 million tons by 2022.
Fracking Proppants Demand Forecast 2022: Global
- The global proppants market is 89.03 million tons, and it is expected to grow at a CAGR of 6.4 percent to reach 114 million tons
- North America accounts for approx. 78 percent of the global proppants market, and it is expected to increase marginally, due to increase in shale activities in the US and Canada
- The APAC accounts for approx. 17 percent of the global proppants market, and it is expected to witness a growth, due to a large number of upcoming hydraulic fracturing projects in China and Australia, and also due to shale gas extraction projects
Global Proppants Market
Global Proppant Market by Type: 2018 (by volume)
- Frac sand accounts for ~86 percent by volume and ~84 percent by value of the overall proppants market and is expected to dominate the market (in volume), due to its availability and low price
- Ceramic proppants account for ~8 percent by volume and ~8 percent by value of the overall proppants market, and it is expected to increase marginally, due its physical properties, stability and is superior to other types of proppants
- Resin coated proppants account for ~6 percent by volume and ~6 percent by value of the overall proppants market, and it is expected to increase marginally, due to its excellent physical properties, however, its high cost could limit the volume growth
Proppants Market by Region: 2018
- North America is the most mature market for proppants. The US is the largest market, in terms of both consumption and production, mainly due to strong demand from the unconventional oil & gas exploration industry, like shale and tight oils
- China is the largest market in the APAC region and a net exporter of the ceramic proppants, and it is expected to remain the largest, due to the increase in the domestic demand for frac sand from the unconventional shale and CBM exploration
- The proppants market in India and Australia are the second and third largest markets in the APAC region and it is expected to grow, due to the increasing demand from CMB exploration
- Russia, one of the key exporters of the Frac sand to the North America region, is the fastest growing market in ROW, due to its efforts to tap the potential shale reserves and due to the availability of high quality sand reserves
Global Proppants Drivers and Constraints
Increase in demand for well completion activities in the North American market and rebounding of oil price are seen as the key market drivers for proppants
Increase in production from unconventional fields
- Increased focus on resource recovery has led to the adoption of high volume usage of proppants per well and use of more efficient proppant mix for the fracking process
- Potential exploitable reserves are expected to drive the market in the coming quarters
Increase in demand for well completion
- Increase in demand for well completion activities in the North American market is seen as the key driver for proppants demand
- With lower oil price affecting the spend of shale operators in the US, the number of unfinished wells in the key shale basins went close to 1500, an all-time high
Increase in crude oil price
- Increase in crude oil price has triggered the demand for proppants
- With oil prices rebounding, oil companies are expected to increase the spend on well completion service
Regulations on environmental concerns and constrained production from suppliers are the key constraints affecting the growth of proppants market
- Stringent government and environmental concerns are constraints to the growth of proppant market
Lower profit margins
- Over the last two years, proppant suppliers had lower margins, due to fall in demand
- Added with supply surplus state, it affected the supplier margins, leading to constrained production
Why You Should Buy This Report
The report provides information about the global and regional proppants market with a regional snapshot of the proppant industry in India, North America, etc. It provides the cost breakup of proppants and explains the best industry practices. The report lists out the industry drivers and constraints and gives key profile of global proppant suppliers like U.S. Silica, Hi Crush Partners LP, Hexion Inc., etc.