Helium
The relevance of Helium
Demand is outpacing supply
- Strong growth in all segments: government defence, technology, medical applications, lab & research.
- Bureau of Land Management system & private crude helium sources are in steep decline.
- Helium production from Liquid Natural Gas is reduced in some regions.
Lack of major new sources will worsen shortages
- Project delays for smaller new sources in the U.S. and Qatar.
- Continued geopolitical strife causes new supply chain challenges.
Rapid helium source cost increases
- Last BLM auction: +135% increase YoY in the average auction price.
- Surcharges in effect from many industrial gas companies.
Helium Applications
The market is anticipated to grow on increasing usage of helium in various high tech applications given its unique attributes. These include: cryogenics, welding, inert atmospheres, electronics, lifting, pressure & purging, hybrid vehicles and helium-filled hard drives.
- MRI (30%)
- Lifting Gas (17%)
- Analytical Labatory (14%)
- Welding (9%)
- Engineering Science (6%)
- Semiconductor Manufacture (5%)
- Leak detection (5%)
- Hard Drives & Tech (16%)
Helium Price
- Helium pricing has risen by 10% per year over the past decade to an estimated 8.0 Bn cubic fee per annum. This excludes military applications.
- Demand already exceeds the current supply, which sits at only 5.4 Bn. cubic feet per annum. This shortfall has resulted in sharp rises in the Helium price.
- The US Bureau of Land Management (BLM) held its FY 2019 Crude Helium Auction in Amarillo, Texas on Aug 31, 2018. No further auctions will be held following cancellation by the BLMS.
- The average 2019 price of US $288/MCF was an increase of $160/ Mscf, or 135%, from the average price of $119/Mscf that resulted from the FY2018 auction.
- However, “Raw Helium is now selling for c.US$350 per Mcf, while refined helium is selling for a whopping $600 – $650 per Mcf, making it a fantastic low volume/high-value commodity”. (The Gas Shortage That Could Kill Space Exploration Jul 08, 2021)
- The critical shortage has caused a Helium price surge to all-time highs. It has drawn investor attention to gas producers like Praxair Inc., which recently merged with Linde Group, Air Products & Chemicals Inc. (NYSE: APD), Gazprom PAO (OTC: OGZPY) and United State Natural Gas Fund LP (NSYE: UNG).