A predictable supply shortage

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Stable and Increasing Demand

Given the uniqueness and applications of helium, it is predicted that demand for helium will substantially grow with global population growth: industries where helium is currently used gets bigger, and/or helium penetrates into more new industries.

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Supply Change

US Government selling-off of its helium strategic reserve came to an end, with last auction in August 2018 and final delivery in 2021.

• Traditionally, US government played a key role in the helium industry. US strategic helium reserve, which was held in Cliffside Field, and operated by Bureau of Land management, was the major helium provider to government agency and industry. (It plays similar role as US strategic petroleum reserve inventory). The BLM’s crude helium plant supplies approximately 27 percent of the U.S. helium demand, and approximately 16 percent of the world’s helium demand.

• In 2013, US passes Helium Stewardship Act of 2013, which mandates Bureau of Land Management (BLM) to sell at auction off its helium reserve and to transfer the functions for selling off and disposing of remaining helium and helium assets to the General Services Administration (GSA) by Sept. 30, 2021, for the purpose of privatisation of the helium industry.

• As of Sep 2022, there is only 2,200 million cubic feet (mmcf) helium in the government storage, equal to approx. 1/3 global helium consumption in 2021.

• The selling-down of US national helium reserve has exerted a huge down pressure on helium price since 2013, which has come to an end. Positive price momentum is building in the helium sector, BLM helium was auctioned for approx. $90 per Mcf (a thousand cubic feet) in 2013, which went up to $280-$337 per Mcf  in August 2018, the last month of BLM auction. Since then, some private contract has gone above $1000 per Mcf. Price information of the helium private sector is highly opaque, which is an obstacle for investment in helium space.

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Few new project to offset above supply change

Helium is largely produced as by-products of natural gas. The number of natural gasfields that present an economical helium concentrate for development is very limited, and very few helium project can come online to fill the gap as the supply of BLM helium disappeared. (This is partially driven by years of underinvestment in oil/gas exploration)