Helium Supply: A Crisis Flying Under the Radar?

by | 7. Jun 2023 - 09:04 | Market

BGR presents short-term study on the market situation; production of the raw material, which is important for medicine and semiconductor production, is highly concentrated.

The German Federal Institute for Geosciences and Natural Resources (BGR) has conducted a study on the current supply situation for the noble gas helium. Although the media focus on helium is much less than on the chip crisis or Europe’s heavy dependence on rare earths from China, analysts are talking about a full-blown helium crisis. This crisis, now the fourth in 15 years, has been ongoing since the summer of 2021 and is causing concern not only among physicians because helium is used, for example, to cool the magnets of magnetic resonance tomographs, but also plays an important role in the production of optical fibers, displays, and computer chips.

Already, rising prices for the gas are putting pressure on major South Korean chipmakers such as Samsung and SK Hynix, as the trade magazine The Elec reported earlier this year. The impact of supply bottlenecks or even failures is likely to hit the industry much harder. At the same time, the helium market is highly opaque, and production is concentrated in just under a dozen countries, the BGR report states. There is no data on production volume from the most important producer countries Qatar, the U.S., and Algeria, and this also applies to global demand. In addition, there were obviously large fluctuations in the quantities of gas produced, which could also be attributed to technical problems.

Despite the crisis proclaimed by analysts, helium was removed from the United States Geological Survey’s list of critical raw materials last year. The EU Commission had already classified helium as no longer critical in 2020 but announced that it would continue to monitor the supply situation closely.

Photo: iStock/Nordroden