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Helium Supply Is Running Dangerously Low

Jun 27, 2019

You may have noticed that your kids' graduation balloons were a little more expensive this year.

It's due to a worldwide helium shortage that has rocked the global landscape.

The helium shortage has led to a price surge of the gas, a contributing factor in the closure of 45 Party City stores across the U.S. this year alone. 

There is no helium futures market, but a U.S. government auction carried out by the Bureau of Land Management last September saw crude helium prices jump a whopping 135 percent on-year for its 2019 delivery, according to Gasworld.

The helium supply crunch extends far beyond balloons and squeaky voices; the noble gas is needed in MRIs, semi-conductors and NASA's rocket fuel engines.

It is the second-most abundant element in the known universe, but it's hard to capture on Earth because of how easily it floats out of the atmosphere and into space.

"Well it's light and it escapes so geologically speaking it has to have a trap and it's very constrained on where you can find helium," said Gianni Kovacevic, chief executive officer for CopperBank and an expert on the topic.

"You are basically paying right now for a truckload of helium $900,000 to a million dollars … Going forward, this is a boom commodity growing by about 7 percent every year," he added.

The United States has been the largest producer of helium since 1925, thanks to a massive reserve found across Texas, Oklahoma and Kansas. But production is set to close down in 2021.

The situation may worsen this summer; one of the largest helium plants in Wyoming is scheduled to take a five-week shut down for maintenance. The closure will take an additional 23 per cent of the world supply off the market.

From an investor standpoint, Kovacevic said investors are not going to be buying helium but junior producers active in the space. "I think you will see helium like you saw cobalt, like you saw lithium, like you saw cannabis. This is coming to a front page on a publication near you."

Reference from KITCO news

 

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