Geopolitical shocks, nitrogen enters an accelerated price increase channel

Due to an attack on the Qatar Ras Laffan Energy Hub that caused production to be disrupted, helium prices have surged dramatically over the past two months, affecting industries such as semiconductor manufacturing, healthcare, and aerospace.

The global economic impact of the conflict between the United States, Israel, and Iran is now far beyond the oil sector. In particular, helium has become one of the most fragile commodities.

The most well-known use of helium is to fill balloons to make them rise into the air, but its industrial applications are even more important.

Qatar’s helium supply accounts for about one-third of the global total. However, since the attack on the Qatar Ras Laffan Energy Hub and the resulting production disruption since late February, spot helium prices have doubled.

The surge in helium prices has affected industries such as semiconductor manufacturing, healthcare, and aerospace. As the cost of this vital industrial raw material rises, the prices of products such as smartphones and MRI machines may continue to climb.

Global supply with 30% of deliveries disrupted

Helium’s importance lies in its non-substitutability.

Helium’s chemical properties are stable, and it is extremely lightweight. And at low temperatures, it has very high thermal conductivity and heat-transfer efficiency. These characteristics make it indispensable in industries with exceptionally high requirements for stability, cooling, and contamination control.

Unlike many industrial raw materials, due to its unique physical properties, helium has no substitutes in some high-precision applications. Moreover, unlike most other resources, helium is rarely produced on its own. In Qatar and some other countries, helium is a byproduct of liquefied natural gas (LNG) production.

This means that helium supply depends entirely on natural gas production: when natural gas output declines, helium production also declines.

The helium supply chain is also unusually concentrated. The United States and Qatar together account for about three-quarters of global supply. In addition, exporting helium is not easy. It requires highly specialized cryogenic containers to ensure helium remains at extremely low temperatures during transport. If shipped out of Qatar, these cargoes must pass through narrow trade corridors such as the Strait of Hormuz, making the supply chain extremely vulnerable to geopolitical conflicts.

Over the past two months, the main reason for the surge in helium prices has been the attack on the Qatar Ras Laffan Energy Hub and the resulting production disruption.

Because there is no official price benchmark for helium, it is difficult to provide an exact number. But early reports indicate that at the beginning of the war, helium prices surged by 50%, while more recent estimates show that since late February, helium prices have doubled.

Anish Kapadia, CEO of market research firm AKAP Energy, said that pressure in the helium market will not ease in the coming months. “Helium storage is extremely difficult, so unlike oil or natural gas—both of which have large reserves that can be used in times of shortage—helium has very limited storage capacity.” Even if the Strait of Hormuz reopens, it will take some time to re-enable those specialized transport containers with temperatures approaching zero kelvin (about -460 degrees Fahrenheit).

The three industries hit the hardest

Against this backdrop, three industries will be the focus of the impact from rising helium prices.

The semiconductor industry is hit first. Helium has good heat-conducting and heat-transfer performance, so it can be used for rapid cooling, which is a crucial part of the chip manufacturing process. In the field of fiber optics, helium is also used to clean vacuum chambers.

According to data from the U.S. Geological Survey, about 17% of helium consumption is related to controlled atmospheres, fiber optics, and semiconductor production. This means that any sustained increase in helium costs could ultimately affect the prices of consumer electronics, cloud infrastructure, and electric vehicles, because these products heavily rely on advanced chips.

The rapid development of artificial intelligence has already significantly increased demand, and at a time like this, shortages or sharp price increases could weigh down the entire industry.

It is worth noting that South Korean chipmakers, including Samsung Electronics and SK hynix, have 4 to 6 months of helium inventory, which provides a temporary buffer. But analysts warn that if disruptions persist beyond the second quarter, supply-chain pressure could sharply intensify.

In addition, the healthcare industry is also affected by helium supply shortages.

MRI machines rely on liquid helium to cool superconducting magnets to extremely low temperatures. Without helium, the machines cannot operate. This is not a niche application scenario.

The U.S. Geological Survey shows that by 2025, medical imaging will account for 15% of helium demand, meaning hospitals and diagnostic centers are especially vulnerable to price spikes and supply delays.

As industry expert Tobias Gilke said, an MRI system consumes an amount of helium roughly equivalent to 90,000 party balloons. If the supply chain tightens further, maintenance service providers may find it difficult to support hospitals in a timely manner, thereby affecting patients’ treatment progress.

Although there are MRI scanners that do not contain helium currently, the installation cost for new equipment is higher, and existing equipment still needs helium replenishment.

The aerospace sector also faces risks, because helium is used to pressurize fuel tanks in rocket propulsion systems, for leak detection, and for cooling. It remains a key input for public and private space missions.

This involves NASA’s Artemis program as well as launch missions by SpaceX and other commercial operators. Since aerospace accounts for about 9% of U.S. helium usage, a rise in prices could increase launch costs and put even more strain on research budgets.

Reporter Yuan Yuan

Text Editor Cheng Hui Wang Zhex i