While it is reported that cutbacks in helium deliveries may not be as severe as first thought, the growing problem of helium shortages looks likely to continue for some time yet.
Measures to reduce cutbacks and new helium production plants have recently been announced, but this may only paper over the cracks in the industry.
The global supply capacity as of 2007 amounted to an annual 200 million m³, while the estimated demand stands at 181 million m³. Such figures suggest supply capacity exceeds demand, but breakdowns at production plants and routine maintenance mean that supply capacity is actually considered to be around 173 million m³ and lower than demand.
Annual growth in demand is 3% on a global scale but in Japan is moving along at 10% and it is just this sort of situation which may cause supply issues to continue for the next 5 years.
If this happens, Japanese suppliers, which are totally dependent on helium, will need to change cognitions regarding helium. Because there are numerous distributors in Japan and the competition is sharp, this has become what is known as a buyers market. Up to now helium has been a strategic product and there have been ways of supplying helium cheaply, and acquiring separated gas supply rights.
This will not always be the case in the future. The majors will decide the allocation or the Japanese market, which accounts for 30% of global consumption. Next year a US port strike is expected which may result in greater instability in the procurement of helium.
Some of the main reasons for the current concern regarding supply shortages are the break-downs and other troubles at production facilities. Troubles continue with the pipeline operated by the US Bureau of Land Management (BLM), which is the world’s largest helium reserve. A breakdown which occurred at the Exxon refining facility has also contributed to the problem, as has the troubles experienced by the 2 Algerian plants (Helios and Skikda) and the fact that the plant in Australia is not operating smoothly.
With the present and potential future situation as it is, overall it will not be possible to make an easy commitment to supply helium to Japan.