The State of Salt: Winter 2021-22

Columns - Salt

Salt insider Rob English reflects on the winter that was and explores the obstacles that may present themselves as you begin to forge your path toward Winter 2022-23.

May 12, 2022

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The winter of 2021 and 2022 turned out to be a bit more robust than previous years with snowfall in most of the population centers. We saw early snows in the lower mid-Atlantic that surprised many and quickly consumed stockpiles. Winters have been arriving later than in past years so this was a surprising for many.

There are many troubling issues politically and logistically in the world today that have impacted all commodities. Road salt is no exception. I wrote extensively in 2021 about the spiraling up of prices with no end in sight on container service. That, understandably, began to spill over into bulk ships as packaged commodities that could leave container delivery in favor of less expensive bulk shipments explored options to lower these costs. Meanwhile, shipping container lines made a nine-fold profit increase of a record breaking $150 billion in 2021 stemming from the supply chain breakdown. Unfortunately, the prediction for 2021-22 doubles that to $300 billion while on-time arrivals and service plunged. As I write this, Shanghai has instituted rolling lockdowns as another COVID resurgence develops. This will close the port and lead to even more problems with availability.

Inflation and money costs are right behind everything else as they ratchet up. These unprecedented conditions continue to adversely impact costs on everything in our snow and ice management world; from new equipment and repair parts down to cutting edges and … salt.

While salt is abundant in the world, the costs of getting it from where it’s mined to where it is used are driven by fossil fuels. And as everyone knows and feels, those costs have skyrocketed. We do not see any significant relief in the prices of low sulfur bunker C that ships need to comply with IMO2020; low sulfur diesel that we need to haul salt by truck, and the port equipment that moves it around. It’s going to be difficult to impossible to predict with any accuracy where salt pricing stabilizes as we approach next season. But without any doubt, it is going up and not insignificantly.

ROAD SALT

Supplies are pretty solid and the regions hit hardest with demand are reloading with the much more expensive salt, but it is coming in and these stockpiles will be replenished. The wild card is the costs of fuels to move it to the end users and expect substantial changes there. Remember, bulk salt is generally about $15-$20/ton sitting on the ground in the point of origin and all the costs after that are transportation. Transportation costs will continue to be key going forward into the winter of 2022-23 and if we get into a situation of fuels allocations, things could go sideways in a hurry. The war in Ukraine has insignificant effect on bulk salt at this time, but all of that could quickly change if a wider conflict develops and it appears to be teetering on the precipice. From this viewpoint, road salt supplies will be strong at the start of the season and so will prices.

PREMIUM MELTERS

Calcium Chloride. Supplies of calcium chloride have been holding up. There is only one domestic US manufacturer of dry calcium chloride products at this time, and they are backfilling all the missing product from Asian and the Middle East. There is no question that imports of calcium chloride will be dramatically less available in 2022-23 and will last until these ocean shipping costs abate. My suggestion to snow pros is the same as it always is in these kinds of market conditions – buy early and hold enough inventory to supply your fight for at least five storms. Prices will go up as soon as diesel costs and other manufacturing costs continue to skyrocket.

Magnesium Chloride. There is one domestic manufacturer of magnesium chloride dry products and a few liquid manufacturers in the United States. Liquid magnesium chloride inventories and availability are pretty strong at the time of this publication. However, dry magnesium chloride products are another story. European supplies have all but stopped completely due to the container debacle and Middle East supplies have sold out and are searching for new ports of entry. Russian production of magnesium chloride has been trying to get into the US market, however, it is under sanctions. So this is not an option even if they could afford the sea freight costs – which they cannot. On all dry imported packaged products, a quantum shift has occurred driven by US-based warehouse unavailability. Warehouse space in all major cities, and particularly those with nearby deep-water ports, are being snapped up and packed to the ceiling to serve internet retail. Logistical supply problems and fuel costs will dominate pricing on everything for the near future. There is no escaping it.

Snow Magazine contributing editor Robert S. English is President of Chemical Solutions, Inc., Franklin, MA. You can reach him at rob@meltsnow.com.