Helium shortage worries party suppliers
Saturday, Nov 17, 2012 06:00 am
Tony Mishra has problems with gas. His party balloon store runs low on helium.
The owner of the St. Albert Great Canadian Dollar & Party Store said the price for the precious gas went up by almost 130 per cent in the last couple of months, due to a shortage in supplies.
He also receives fewer helium tanks than before, causing him to lose profit and sell fewer balloons.
“For some stores it’s like zero profit. We still manage to get helium,” he said.
“We keep it for our customers and to keep our customers. We are losing profit but we use it as a marketing tool.”
Mishra said customers visit his store to buy balloons and then shop for other party supplies. If helium supplies remain low, he worries he may have to downsize.
He already hiked the price by 15 cents to $1.65 to make up for some of the cost, selling 10 to 20 per cent less balloons than before.
Over the summer, news emerged that the world’s supply of the precious gas was running out. But professor John Beamish at the University of Alberta’s department of physics said it’s not the gas supply but the supply chain that’s causing shortages – for now.
Helium in party balloons accounts for only five per cent of the gas’ worldwide usage. Most of its supplies are used for manufacturing, research and medical care, such as the cooling of MRI machines in hospitals.
It is also used in welding, in the production of LCD screens and by NASA, which uses helium to clean out its rockets.
The majority of the world’s supply in helium comes from a number of natural gas fields in the United States.
Helium factories extract the precious gas from the ground, purify it and ship it to the consumer.
Beamish said if these factories shut down for maintenance, supply runs short.
“If one of them is shut down for maintenance it’s probably OK but I think last summer there was a period were two of them were shut down,” he said.
“And when there’s a shortage, you can’t get it delivered and then the big industrial, medical and research helium users with contracts get first priority.”
Balloon facilities and party suppliers are not considered critical users and are lower on the supply list, he said.
Beamish uses liquid helium for research in his lab and said he’s had no problems getting it in the past, though he heard of universities in other cities that did.
He expects the shortage will come to a halt by the winter, once the factories are up and running again.
He added it won’t be for another 20 years that the known helium reserves will run out. But costs will go up before that.
Helium prices outside North America are almost three to four times higher since the United States not only relies on its factories but its Federal Helium Reserve.
The reserve is based in a natural underground reservoir in Texas where helium has been stored since the 1960s. In 1996, Congress mandated that all the gas in the reservoir be sold by 2015, which kept prices artificially low.
“By 2015 they have to have it all sold off and at that point there’s no reserve and no buffer in the market,” Beamish said.
“The price has been low because of U.S. government policy and that’s on the verge of changing.”
He added that once the world economy picks up again, factories will require more helium to build products such as LCD screens. Once that happens, supply will not be able to keep up with demand.
“If there’s a real shortage and nowhere to get the helium, the price will go up,” he said.
Fred Holowach’s Bears and Wishes gift store isn’t complaining about a shortage in the precious gas.
The local store sells teddy bears for special occasions, delivering them to hospitals with a bouquet of balloons.
Holowach said he was told that supplying medical patients put them higher on the list of helium receivers.
“Because we are a gift store and we service all locations we are told that we are in a different category than dollar stores,” he said.