Mid-Winter Salt Report

Mid-Winter Salt Report

At year’s end, it’s all peaches and cream, says salt insider Rob English, but the remaining winter will determine if things stay sweet or turn sour.

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December 13, 2018
Rob English
In my 2018 summer and fall State of the Salt reports, I highlighted problems in the upper Midwest with salt supplies stemming from production challenges at two major producers; one with flooding in their mine and the other with a labor strike that substantially cut production at the largest salt mine in the world. I stated it would only be a problem for the affected areas “if it snowed.” And while all the weather prognosticators had their usual conflicting views, the majority opinion in the early fall was for continued warm and the possibility of a weak El Nino formation.

Well, that didn’t go as planned.

Instead, we have had early and significant arctic air blasts that have found moisture from the greater than weak El Nino to deliver snow across much of the nation, from the Pacific Northwest across to the Upper Midwest.  Adding insult to injury, the Southern mid-Atlantic states of North and South Carolinas and Virginia saw snow that was not only earlier than normal, but also delivered an entire average season’s snowfall in one event.  

As you might expect, these regions are, for the most part, paralyzed as the snow and ice quickly overwhelm the limited mechanical and chemical resources.  While most of the state and municipalities had some salt and deicers on hand, that early snow quickly consumed the in-stock tons in the impacted region. Reloading is now underway albeit slowly as they continue to recover from what was a significant event for them with transportation disruptions that are spreading out over a week post-event.

Turning our attention to the Upper Midwest, things are not much better than they were in the mid-summer with supply of road salt very tight and limited.  A rush to market from opportunity-based importers did put some tons along the Great Lakes, but not nearly enough to manage a sustained winter of precipitation that started early.  It is hard to guess how things will shake out with supplies in the Wisconsin-Minnesota region, but right now it’s still pretty thin.

The Mid-Atlantic from New Jersey up into New England got an early plowable snowfall followed by two weeks of sub-freezing weather. While that didn’t tap the salt reserves too much, the cold has been settling in and we are seeing frost moving down into the ground for the first time in 3 years of warm winters.  Whether this weather pattern will hold and continue is hard to say, but a change in the jet stream suggests that we will go back to the predicted warmer weather and rain.  If it stays cold, that frost in the ground will up the ante for deicers in any events.

So where does this leave salt supplies?  

The coastal regions continue to be well fortified with salt inventories and while there is some product that reached the inner markets, not much is there should things get busy with demand.  Suppliers of road salt in the Hutchinson, Kan., area that can normally back-fill shortages to the upper Midwest are tapped out and not taking any additional commitments. That means, for all intents and purposes, that the quick response force (QRF) of reinforcements on salt supplies for the Upper Midwest markets are not there and won’t be there this winter.  

This all hinges on the weather which creates demand.  If demand turns on, there will be supply and availability problems in the interior US. Alternative deicing products are more expensive than salt, which may be the only option if Old Man Winter comes back and hits the snowbelt in the Upper Midwest.  The coastal regions from North Carolina to the Canadian border should be fine with salt supplies … Again, provided weather is seasonally normal.

February 2015 reminded many in the business that when that demand switch is flipped to “MAX” supplies of everything for snow and ice control will quickly run out.  As is always the advice of and the motto of the Boy Scouts: “Be prepared.”  If you can accurately predict the weather for the balance of the winter, then you will be not only fine but also sleep well knowing you are adequately covered with salt and bagged supplies.

Premium Deicers
Calcium chloride comes in flake, pellet, and liquid forms and is in very strong inventory condition right now.  Same for magnesium chloride flake, pellet, and liquid inventories.  If problems arise, these products do have adequate inventories to service a normal winter market for premium deicers. However, if these products are suddenly put into a position of back-filling salt shortages, then they will experience a “run-on-the-bank” and quickly get pulled down at which point those products are allocated based on previous purchases.  That means if you bought 1,000 tons of salt last year and 20 tons of either calcium or magnesium chloride, and you cannot get salt, you will only be able to purchase a percentage of the calcium chloride quantity you purchased and not simply expect to get exponentially more to offset losses in salt tons.   

What does that mean to the average buyer? At first sign of salt supply trouble, should you decide to switch to a premium melter do it quickly and commit to tons quickly before the run-on-the-bank starts.  Once the allocation decision is taken, there is nothing that anyone can do to circumvent that process which is intended to be fair and equitable for existing buyers of these products and not victimize those buyers due to a rush of demand caused by failure of salt supply - the most abundant chemical commodity on the planet.

Liquids
We continue to see more and more use of liquid deicing products that run a broad range of types and flavors; calcium chloride and magnesium chloride liquid both with and without boutique additives. Generally, the lion’s share of demand for liquids is for anti-icing which is treating surfaces before the storm.  Many communities and states are making their own salt brine from road salt. However, be careful that if salt falls in short supply, then there will be less for making brines.  We see more tons and gallons of salt brine used than any of the other liquids, but that is vulnerable to problems for the reasons stated above.

Be a Boy Scout and be prepared.  For the most part, we are moving along with comfortable market servicing on all deicing products at the current demand rates.  I liken potential problems to that of the availability of portable generators when a widespread storm-related power outage happens. Suddenly you can’t buy a generator in the affected area for anything.  Deicers can easily fall into a comparable situation where the alternative sources are not sufficient to cover the entire potential needs of the market.

Right now, it’s all peaches and cream.  The weather will determine if the cream sours and peaches run out.

Rob English is president of Chemical Solutions Inc. and is a frequent Snow Magazine contributor and guest columnist.