Helium Price Expected to Boom Globally, Here’s Why

Helium being a non-renewable and irreplaceable element, is a very crucial constituent owing to its uses in Supercomputing, hard drives, Space technology, and even MRI’s. Russia’s invasion of Ukraine has worsened the helium supply to the US. Since Helium must be liquified before transportation, this makes it very hard for those war-torn countries to keep up with the supply. Helium is found to be the most abundant element in earth’s crust after hydrogen, but the extraction process of the element is highly water-consuming, leading to very little to no profit for the mining firms.

Hugoton, the biggest Gas field in the US, is on very major energy companies’ radar because of innovations in the extraction process brought about by ‘Total Helium’, which uses relatively lower amounts of water compared to existing processes. The rise in demand is expected and obvious even due to the increase in the uses of electronics and hard drives, especially in countries like the US and South Korea. Total Helium de-watered all their tech to mine helium out of Hugoton gas fields.

The investor world usually selects a product or commodity which is likely to be in shortage in the global market and starts investing in that commodity, trying to utilize the shortage situation to make profit. Hence the “wall street” investors chose the product Helium in the recent months. Investors have realized the commodity’s rarity and niche downstream market and have started investing in various technologies to extract helium.

As per ChemAnalyst, the shortage of helium is not recent, many superconducting magnet laboratories have been shut down since 2017 owing to lack of helium, but the newfound interest from the energy companies and huge investment rally from the wall street investors led to a rise in price of helium to almost 100x the price of LPG. That the current bubble in the Helium market is eventually going to burst is a certainty, however, investors and market players can expect boom to prolong at least until the end of the current financial year as EIA predicts natural gas production and expansion to be constrained till the first quarter of FY23 and perhaps beyond.