The global helium business is in turbulent times

THe globalhelium market is going through turbulent times, with the balance of power starting to shift away from the industrial gas giants and towards seCondary and tertiary players gaining more advantage.

That’s the view expressed by Phil Kornbluth, a prominent market commentator at Kornbluth Consulting, during a recent webinar. “Many Tier 2 and Tier 3 gas companies feel taken advantage of by the big gas companies during the gas shortage,” Kornbluth said.

He further explained: “These companies have been hit with huge price increases and realized they were not getting a fair deal. This unbalanced market environment has prompted them to take more autonomous measures.”

Kornbluth noted that the situation has led some companies to buy their own helium trailers and often bypass distributors. "For example, large producers such as ExxonMobil are now more willing to sell gas to smaller gas companies," he said. "Before, they were reluctant to do so because of concerns about things like credit risk, but now they don't have those concerns anymore."

He added: “Today, large producers are selling to a wider range than ever before. This change is not just an adjustment of market strategy, but also a response to market demand and supply chain flexibility.”

Gazprom is another company that has entered into more supply agreements with smaller companies as sanctions restrictions stemming from the Russia-Ukraine war have led to the termination of several agreements. “These sanctions have forced Gazprom to reassess its market strategy and look for new partners to ensure smooth market access for its products,” Kornbluth noted.

Kornbluth has also noticed a growing number of helium startups, which he estimates are close to 60. "These startups coming out are injecting new energy and competitiveness into the market," he said. "They (the startups) sell to whoever offers the highest price. Now that's a very important thing."

He added: “The helium industry is still an oligopoly, but I think that oligopoly is starting to show cracks. The market is becoming more diverse and competitive, which is a positive sign for the industry as a whole.”