The forthcoming helium crisis: Fact or fiction?
A curious bit of news has been circulating the commodities market for the past few months regarding helium, as some believe that a significant shortage is looming in the near future. Helium is an important commercial element beyond its traditional application as a filling agent for balloons. It is used in pressurized coolants and welding operations, among other industrial applications. As such, a shortage would create a huge headache for more than a few companies should the much-feared drop in supply occur.
According to NBC News, the problem began in the 1990s, when the U.S. government began to reduce its involvement in the national helium market. As a result, federal sellers began to offload significant amounts of helium at below-market prices, thereby distorting market costs and behaviors. A steady flow of helium into the market, thanks to federal authorities, created an incentive for companies to purchase helium rather than manufacture their own.
That doesn't mean there aren't any players who stand to gain from the looming shortage. Two major commercial gases firms, Air Products [APD] and Praxair [PX], have been cited by financial experts as potential sources of portfolio growth for investors who want to enter the helium market in a significant way.
The upward price momentum would be pretty straightforward. If the Obama administration and Congress fail to pass a bill that would extend the helium sales – as NBC states is reportedly being negotiated – Air Products and Praxair would find themselves with a higher level of demand. While their production capacities haven't been fully tested, it's likely that these companies would jump at the chance to sweep up a much bigger market share.
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