From De-icing to Dining, Salt's Enduring Role in the Economy

By Patrick Davis

Nov 12, 2024

Interested to know where salt goes once it’s been mined? This infographic breaks it down into key industries like de-icing, chemicals, food, and more.

The global salt industry traces its origins back thousands of years, making it one of humanity's oldest economic activities. Today, the salt industry continues to thrive on high demand, catering to essential sectors with its wide range of applications. From seasoning our meals to keeping our roads safe during winter, salt's role is multifaceted. A closer look at the end market demand for salt unveils the sectors driving its consumption.

Leading the Way: De-icing Demand

The de-icing sector is the largest salt consumer, accounting for a substantial 41%1 of the market. This segment's significant share highlights its vital role in ensuring transportation safety in cold climates. Every winter, large amounts of de-icing salt are applied to roads, highways, sidewalks, and parking lots to melt ice. This practice is essential for public safety, as it significantly reduces traffic collisions by up to 88%2 during icy conditions, ensuring safer travel for everyone. Salt-based de-icers keep daily life moving smoothly during the winter by preventing ice from forming on the surfaces it covers. Moreover, road conditions contribute to over 544 million vehicle hours of delay annually2, emphasizing the importance of effective winter road management.

The Chemical Sector's Strong Appetite

The chemical industry follows closely, representing 38% of salt consumption. Salt serves as a foundational raw material in producing various chemicals, including chlorine and caustic soda. These chemicals, in turn, play vital roles in manufacturing processes across industries, from water treatment to the production of PVC.

Distributors’ Role in Salt Consumption

Distributors facilitate the movement of salt from producers to end consumers across different industries. They act as intermediaries, handling salt logistics from producers to final end users across industries. For example, a distributor might supply salt to a food manufacturer, a municipality for road de-icing, and an agricultural supplier. So, they facilitate the movement without directly consuming the product. However, they do purchase it to subsequently sell it to end users. For instance, Univar Solutions3 may buy salt from Cargill to sell on to various businesses, including local retailers, industrial users, and municipalities. Distributors make up 10% of salt consumption.

Salt in Food: A Taste of Tradition

The food industry, with a 4% share, underscores salt's timeless role in culinary arts. Beyond flavoring, salt acts as a preservative, extending the shelf life of numerous food products. This segment's steady demand reflects salt's indispensable place in kitchens around the world.

Salt’s Agricultural Applications

Agriculture accounts for 3% of the salt market. That’s because salt is an essential mineral for livestock health. Adding it to animal feed helps improve digestion, metabolism, and the overall well-being of animals like cattle, sheep, and horses. Salt is also sometimes added to silage (fermented feed) to prevent spoilage. It helps reduce mold growth and bacterial contamination, ensuring the feed remains nutritious and safe for animals. Additionally, salt is sometimes applied to manage specific soil conditions, to improve soil structure, or to naturally control weeds. However, salt application is carefully managed, as excessive salt can harm crops.

Niche Yet Vital: General Industrial Consumption

The general industrial sector accounts for 2% of total salt consumption and includes diverse applications outside of chemical, food, and agricultural uses. Industries in this category use salt in manufacturing processes, metal processing, oil refining, and textile dyeing. For instance, in metal processing, salt is used for deoxidation and to create a controlled atmosphere for heat treatment. In oil refining, salt aids in removing impurities from crude oil, enhancing the refining process. Textile manufacturers use salt to fix dyes to fabrics and improve color consistency.

Specific companies that might utilize salt in these capacities include Akron Steel Treating Company4 for metal treatment processes, Chevron Corp (NYSE: CVX) in oil refining, and Gildan Activewear Inc (NYSE: GIL) in textile dyeing. Although salt use in these applications is smaller in scale than de-icing or chemical feedstock, it remains essential for certain manufacturing functions.

Water Treatment: A Clear Need

With a 1% market share, the water treatment sector relies on salt to soften hard water and in purification processes. This essential use case underscores salt's role in ensuring access to clean water, a critical resource for homes and industries alike.

The 'Other' Spectrum

Lastly, the 'other' category, making up 1% of the market, captures salt's use in numerous lesser-known applications, from specialized manufacturing to environmental control. This segment reflects the ongoing innovation in salt usage, expanding its relevance across new industries.

The Versatility of Salt

The salt industry's reach into multiple sectors illustrates its foundational importance in our daily lives and the economy. From keeping our roads safe and our food flavorful to playing a critical role in chemical production and water treatment, salt's versatility ensures it remains a staple in various industries.

Yet, salt is a commodity that tends to be overlooked by investors. It doesn’t sport the headline-grabbing importance attached to commodities like copper and lithium and doesn’t have the consumer appeal of coffee and cocoa. So, salt remains an omnipresent but understated player in the global market.

Despite its modest visibility on the investment stage, salt's significance in industrial processes and steady demand across various sectors make it a staple commodity with a level of market stability attractive to those with an eye for long-term investments.

Moreover, salt's adaptability to climate-driven demand, especially in de-icing, showcases its role in public safety and infrastructure maintenance. This need is particularly pronounced in regions experiencing severe winters, where salt's application ensures functional transportation networks, highlighting a seasonal yet predictable spike in demand.

The overlooked nature of salt as an investment opportunity might stem from its widespread availability and perceived low cost. Yet, salt's economic dynamics, such as production costs, the geographical distribution of major mines, and supply chain logistics, reveal nuanced investment opportunities. Regions with significant reserves or advanced technologies can offer competitive advantages, making companies in these areas attractive investment targets.

For investors seeking a potentially stable investment in the commodity markets, salt may prove appealing.

Invest in Salt: Discovering Hidden Market Opportunities

Atlas Salt Inc. (TSXV: SALT) (OTCQB: REMRF) is bringing North American investors a unique opportunity to invest in a defensive mining stock. The Great Atlantic Salt Project is the first new underground salt mine in North America in over 20 years, strategically located near key markets with excellent infrastructure including roads, a deep-water port, and access to high-voltage power. This reduces transportation costs and positions Great Atlantic as a low-cost, long-life producer of salt.

Furthermore, competing mines have aging assets, and international suppliers can be displaced on distance and carbon emissions, with Great Atlantic expected to be one of the world’s lowest greenhouse gas mining projects.

De-icing road salt is the biggest single individual market for salt in North America, and Atlas’ Great Atlantic Salt Project is situated right where it’s needed most. Salt is a non-cyclical commodity and a truly defensive investment. Best of all, an efficient salt mine drives incredible long-term free cash flow.

A comprehensive feasibility study, greenhouse gas emissions survey, and both environmental and economic assessments have confirmed the viability of the Great Atlantic Salt Project. With these milestones achieved, pre-construction development is now actively progressing.

Intrigued by this defensive growth stock? Amid the cyclicality of the mining sector, Atlas Salt stands out.

Explore the Atlas Salt Opportunity

Sources

  1. U.S. Geological Survey, Mineral Commodity Summaries, January 2024.  https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-salt.pdf 

  2. Highways Agency. Road Salt Primer, 2015. https://www.highways.org/wp-content/uploads/2015/01/road-salt-primer-final.pdf

  3. Univar Solutions. Cargill, 2023. https://www.univarsolutions.com/suppliers/cargill

  4. https://www.akronsteeltreating.com/blog/2022/07/21/benefits-of-salt-heat-treatment

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