The helium market is no stranger to instability. Helium Shortage 3.0, beginning in 2019, has been the third major shortage in the last 15 years. Between depleting reserves, political tensions, and now a global pandemic, those in the industry are used to helium keeping them on their toes. With government lockdowns and economic upheaval, what does the narrative look like for this perplexing gas during these unprecedented times?
This year, the novel coronavirus has temporarily decreased helium demand and has placed much of the market on hold. When the Chinese economy went on lockdown after the New Year, the world’s second largest helium market was shut off. Without this demand, the helium demand was fractioned. China serves as a port for cargo ships transporting helium to the rest of the world but was refusing imports and exports. China wasn’t the only country to close its borders, as many other countries refused international travel of any kind. Empty containers needing to be refilled have been challenging to obtain with travel restrictions as well.
As the logistics of transportation and international business were disrupted, the need for helium has dropped significantly as tourism, elective surgeries, and doctor’s appointments have been affected by government shutdowns and social distancing measures. The experts at gasworld estimate that the demand for helium has currently dropped by as much as 10 to 15 percent.
Helium for the party industry makes up 10 to 15 percent of the helium demand in the United States alone. With social distancing restrictions in place, weddings, graduation parties, high school proms, baby showers, and birthday parties have been limited to very small gatherings or cancelled altogether. The biggest company in the party industry, Party City, closed its doors during the stay at home order this spring. Later, they began opening for curbside pick-up and delivery, but this does not change the fact that the pandemic has hijacked gatherings and monumental celebrations. As you can imagine, with many financially struggling, party balloons are not a top priority, even if they are celebrating an event of some sort.
After consistent instability, has this decreased demand given the global helium supply an opportunity to catch up? Maybe, maybe not.
“Helium Shortage 3.0 will wind down approximately two quarters sooner than it would have without the occurrence of COVID-19,” estimates gasworld. Hopeful that the global economy will restart soon, this may be a silver lining in the future for the helium market.
It’s clear that the decreased demand is temporary, but it is unclear whether or not COVID-19 will actually help the shortage catch up. On the flip side, as an essential resource, areas of the helium market may see a jump in demand later this year. The industry anticipates the shortage to persist as they predict that hospitals will begin to stock up on helium for MRI machines and usage in oncology. As with any pandemic related news, it is too early to determine the adverse effects for certain.
The sale of the BLM Federal Helium Reserve in Amarillo, Texas, will be a significant interruption to supply as well. It is the only helium storage facility in the world and will be auctioned off to private owners this fall. Its offline status is anticipated for fall of 2021. At its current rate, the Federal Helium Reserve is only expected to supply helium for another four to five years, which has been a major concern and cause of Helium Shortage 3.0.
Other plants have planned to expand, such as the plant in Algeria and a third plant in Qatar. When these plants will be able to go online given the pandemic is unknown. Until then, the shortage is still a great concern.
Now more than ever, it is essential to partner with a gas supplier your business can trust in times of shortage and global crisis. Rocky Mountain Air is committed to building partnerships with customers and serving them with flawless dependability despite the obstacles that may come.
Throughout COVID-19, we have been implementing necessary safety measures to continue providing our customers with atmospheric gases to keep their essential operations running smoothly. Our hope is that our safety precautions may be honoring to both our employees and customers. You can see our best practices for cylinder delivery and walk-ins here.
We look forward to serving you during these unique circumstances and well into the future. Please contact your local branch today in Colorado, Idaho, Nebraska, Utah, or Wyoming, or email firstname.lastname@example.org for any questions regarding safety protocols or if you are interested in partnering with us to supply your helium applications.