Proppants Market

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The global Proppants Market is valued at USD 7.9 Billion in 2022 and is projected to reach a value of USD 14.2 Billion by 2030 at a CAGR (Compound Annual Growth Rate) of 8.8% over the forecast period.

Proppants is a solid material, typically sand or artificial ceramic used to keep an induced hydraulic fracture open during the fracturing treatment. Hydraulic fracturing, on the other hand, injects sand, water, and chemicals into a well under highly-controlled conditions. The global Proppants market is expected to widen during the forecast period owing to rising demand from the oil and gas industry combined with the utilization of Proppants in various exploration activities. Proppants is one of the pivotal components of hydraulic fracturing, which is highly used in the oil and gas industry. The development of new fracking techniques, such as horizontal multistage fracturing, is further expected to increase the footprint of the global Proppants market during the forecast period.

Improvements in fracturing technology and other drilling techniques, rising Proppants consumption, and constant innovations are expected to widen the scope of the global Proppants market. A growing number of shale gas and crude oil exploration activities across developed economies in the U.S. and Canada is increasing sales of Proppants during the forecast period. The surging demand for fossil fuel products such as gasoline, natural gas, and diesel across the globe is prompting government agencies to increase investments in extracting and producing shale and natural gas. For instance, according to the Energy Information Administration (EIA), natural gas and crude oil production increased by 9.8% and 12.7% in 2019 and 2018, respectively. This will give rise to the demand of Proppants.

Prominent oil and gas manufacturers are inclining towards increasing the production of natural gas and shale gas, thereby creating an opportunity for the global Proppants market to flourish. Increasing oil and gas exploration activities and discoveries drive the demand for the Proppants to widen. For instance, in 2019, the U.S. Government announced the discovery of new fossil fuel reserves in New Mexico, North Dakota, and Texas, with a capacity of 1.1 billion, 0.7, and 3.5 billion barrels. Proppants are utilized heavily within oil and gas wells. Such developments are expected to widen the scope of the global Proppants market towards a higher growth potential.

Economic Insights

Recessions in the past can be used to study the effects of current ones. It was anticipated that the manufacturing sector would decline during the recession. Germain claims that the present recession, meanwhile, is among the mildest one's ever documented in the previous 100 years. The recession mainly affects the United States and several European nations, like the UK and Germany. Europe's economy is in recession due to its greater exposure to the energy crisis. The illegal and unprovoked conflict between Russia and Ukraine significantly impacted the NTC thermistor industry. The fighting severely impacted the supply chain. The prolonged conflict is causing issues in numerous industries.

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1. Rising Government Support: Rising government initiatives are expected to increase the footprint of the global Proppants market incrementally. For instance, the U.S. government is focused on implementing numerous subsidies and tax exemptions to promote and increase the production of fossil fuels in the country. According to the Environmental and Energy Study Institute, the U.S. government annually provides nearly USD 20 billion of direct subsidies to the fossil fuel industry. More than 80% of these funds were allocated directly to crude oil and natural gas operations for increasing domestic production.

2. Increasing Initiatives from Dominant Players: The global market leaders aim to expand their production capacities to meet the surging demand for Proppants. For instance, in September 2019, U.S.-based Silica, a global industrial minerals and logistics company, announced that they were acquiring a former ceramic Proppants manufacturing facility in Georgia, U.S. This acquisition was made to increase the production of high-end Proppants.

3. Rising Awareness: Growing consumer awareness among the general population regarding the depletion of natural resources is prompting government bodies to introduce stricter regulations against excluding renewable sources.

Market Segmentation

The global Proppants market can be categorized on the following: Type, Application, Ceramic Proppants, and Regions. Based on type, the market can be categorized into frac sand, resin-coated Proppants, and ceramic Proppants. By application, the market can be segmented across shale gas, tight gas, coalbed methane, and others (tight oil, deep gas and subsea hydrates). By ceramic Proppants, the market can be fragmented across high strength ceramic Proppants, intermediate strength ceramic Proppants, light weight ceramic Proppants, and others (ultra-light weight propants, ultra-strenght Proppants, and ultra-conductive Proppants). By Likewise, based on region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Based on Type

Frac Sand to Dominate Market Owing to a Wider Product Availability

The global Proppants market is expected to be dominated by frac sand in terms of sales and revenue. Frac sand is manufactured from naturally occurring, highly pure sandstone. These Proppants are often applicable under a close pressure of under 6,000 psi. The growing costs of US shale gas and the development of a new type of gas basins are further expected to push the segment's growth during the forecast period. Frac sand is the preferred type of Proppants by many manufacturers when the price of oil declines and E&P operators must reduce their production costs. These factors are expected to add value to the segmental growth. Ceramic Proppants is expected to grow with the fastest growing CAGR during the forecast period owing to the most viable substitute of frac sand.

Based on Application

Shale Gas to Account for the Largest Market Share Owing to Rising Application for Proppants

The shale gas segment will hold the largest market share during the forecast period owing to increasing utilization of Proppants in the upcoming years. Shale gas contains 70 to 90 percent of methane, which helps generate electricity and acts as a domestic heating and cooking source. These factors are expected to widen the scope of the segmental value during the forecast period. Increasing shale gas extraction will further add to the global Proppants market during the forecast period. Tight gas is expected to grow with the fastest-growing CAGR during the forecast period owing to the ability to produce wells at an economical rate during hydraulic fracturing.

Based on Region

North America to Own Largest Market Share Owing to Rising Government Initiatives

The global Proppants market is expected to be dominated by the North American region in terms of sales and revenue during the forecast period. Rising government emphasis on increasing the production of crude oil and gas production is the primary factor favouring the market's growth in the region. Rising government initiatives toward increasing shale gas production are further expected to add to the market value. According to Natural Resource Canada, the government of Canada aims to increase the production of tight and shale gas by more than 80% of the country's capacity by 2035. Additionally, increasing hydraulic fracturing activities within the region will add value to the North American Proppants market during the forecast period.

Europe is expected to grow with the fastest growing CAGR during the forecast period owing to the increased development of natural gas production and petroleum products. Additionally, supportive government policies and a stance towards natural resources are expected to increase the market's footprint in the region.

Competitive Landscape

The global Proppants industry is expected to be dominated by a handful of players. However, over the forecast period, numerous startups and other players in the market are expected to occupy a wider share, creating a highly competitive space. Production methods are being optimized for making the most viable products. Players are also focused on extending their product portfolio to serve a wide range of end-use industries.

The key players in the global Proppants market include - Carbo (U.S.), Saint-Gobain (Courbevoie), JSC Norovich Refractories Plant (Russia), Superior Silica Sands (U.S.), Fairmount Santrell (Chesterland), Badger Mining Corporation (Germany), RBN Energy (U.S.), Changing Proppant Corporation, Silica Company (Katy), Covian (Independence) among others.

Recent Market Developments:

· March 2020: COVIA announced that it completed the expansion of its Canoitas facility in Mexico. The development will enable COVIA to add 350 tons of annual silica production capacity to support the growth of consumers in the Mexican region.

· March 2020: COVIA announced they were expanding their facility's capabilities in North America to serve the coating and polymers end-markets. This announcement was made to create a highly efficient modern facility, with the project estimated to cost around USD 45 million.

· December 2019: Select Sands Corporation's subsidy Select Sands America Corp announced that they signed a pact to supply Proppants. The company is expected to serve the production in the Eagle Ford basin with Select Sands to provide reliable and high-quality Proppants to achieve the production results.

Segmentation of the Global Proppants Market