serviced the metalcasting industry were able to modestly increase the amount headed for metalcasters, while the total capacity of silica sand increased dramatically. Due to a number of issues in-
The amount of sand destined for metalcasting facilities has remained fairly steady, but the industry’s total market share has steadily decreased during the fracking boom.
cluding differing technical specifica- tion, the price of sand destined for metalcasting facilities is significantly lower than sand used in fracking. Sand is a relatively insignificant cost for oil and gas producers, whereas it’s a material integral to the met- alcasting industry’s ability to run smoothly. Tis difference in price has led some sand suppliers to focus primarily on fracking operations, but the metalcasting industry still has options in acquiring its necessary volume of sand. Also, sand destined for metalcasters is less profitable per ton, but the industry provides stabil- ity when compared to oil and gas producers. Considering the growth in both supply and demand of frack- ing sand, the average price for industrial silica sand as a whole has increased substantially since 2007. Sand destined for the met- alcasting industry had remained relatively stable until the shortage in 2011. According to the Bureau of Labor Statistics, the average price then jumped nearly 20%. Since that increase, the price ap- pears to have stabilized. Fracking sand is driven by the
price of gas and oil, meaning sup- pliers can go from not being able to produce sand fast enough to a situation where they can’t turn off the faucets fast enough. Meanwhile, the price of castings is relatively stable. Consequently, the oil and gas market can go through two or three economic cycles for every one of other industries based on a variety of worldwide economic factors. Also, metalcasters tend to require a relatively standard amount of sand per month at a static location, while fracking demand can spike when a particular well needs a large amount of product.
38 | METAL CASTING DESIGN & PURCHASING | Nov/Dec 2014
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