The rising cost of a grain of sand is inflating the price of materials like glass and concrete even as energy bills flatten, highlighting its importance to everything from jam jars to global infrastructure projects.
Sand is the most widely used natural material in the world, mainly in construction and oil and gas fracking as well as some industrial processes such as memory chips due to its high quartz content. Sand is the primary raw material for glass, accounting for about three-quarters of the ingredients.
Huge land reclamation projects such as Singapore’s Tuas megaport, due for completion in the 2040s, have caused demand for sand to soar in recent years, even as awareness has grown that dredging from river floodplains , beaches and seabed can lead to coastal erosion and flooding.
US sand miner Silica Holdings plans to raise prices of sand products used in glass, construction and chemicals by up to a fifth from June to offset rising labor, transportation, materials and manufacturing costs, it said. stated last month.
“Above-average price increases” for sand used in urban construction are expected in 2023, according to the US Geological Survey. Although sand and gravel are “abundant” worldwide, environmental regulations, geographic distribution and quality issues can make production “uneconomical,” he warned in January.
Sales of sand and gravel mined in the US for industrial purposes rose 78% in value last year, well above the 30% increase in volumes, according to the US survey. This was driven by glass manufacturing, as well as fracking and cement.
In Germany, the price of glass bottles, windows and jars increased by 27% in January compared to the previous year, according to the latest data from the country’s statistics office.
Saint Gobain, the French glass and building materials maker, told investors in a call earlier this year that higher prices for sand and other materials continued to drive up costs in the first three months of 2023, negating the effect of lower-than-expected energy prices. The group’s raw material and energy costs rose by 30% last year to 13 billion euros.
This year, it expects to raise prices enough to overcompensate for commodity and labor inflation, after raising prices 10% last year. “Every time we have the opportunity to raise prices, we do it,” Chief Executive Benoit Bazin said.
The higher price of raw materials such as glass and concrete has given developers an excuse not to pass on lower energy costs to consumers. “There’s a bit of a lag, a reluctance on the part of manufacturers to cut prices,” said Andy Murphy, head of industrialists at London-based investment research firm Edison Group.
China is leading the largest increase in sand demand globally, while the African continent is leading the fastest increase, due to population pressures and road, hospital and school construction projects, according to research by Pascal Peduzzi, an environmental scientist at the United Nations Environment Initiative program.
Much of this demand is met by illegal sand mining. “Sand is easy to grab, you have a shovel and a truck and improvise as a contractor. . . but it can only be replaced by geological processes that can take hundreds of thousands of years to produce,” Peduzzi said.
“Things on the ground are getting worse,” he added, noting that Indonesia, Malaysia, Vietnam, Thailand and Cambodia have previously banned or restricted natural sand exports amid fears about the environmental and social impacts of watercourse extraction. .
The UN is helping build a satellite tracking system to monitor the side-to-side detector movement of sand dredging vessels in the North Sea, Southeast Asia and along the US coast, and is in discussions to create a global sand observatory to bring transparency to international supply chains.
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