Even without any contract cancellations, 30 % of US Silica's production is exposed to potentially falling
frac sand prices in the spot market, which could mean 2015's financial results decline compared to the record results of 2014.
Not exact matches
As long as investors in
frac sand suppliers are aware of the risks of that prolonged depressed energy
prices, an overdue market correction, and industry overcapacity pose, then they can adjust their holdings accordingly as part of a diversified portfolio that can minimize the risks of devastating, permanent losses.
However, should slowing global economic growth or recession result in a long - term reduction (three to five years) in energy
prices, then U.S. Silica and its peers will face the prospect of their current lucrative contracts expiring and themselves sitting atop literal mountains of
frac sand, while demand may have fallen off a cliff.
The long - term contracts these companies have secured for this increased production means that a short - term decline in energy
prices, and thus demand for
frac sand, isn't a major concern.