Helium Havens: Navigating The Investment Landscape

Helium is a highly versatile commodity with a multitude of uses, from filling party balloons to cooling down magnetic resonance imaging (MRI) machines. It is in high demand and short supply, with an estimated annual global demand of around 6 billion cubic feet. As a non-renewable resource, there are only two ways to extract helium: by getting it as a byproduct from natural gas production or obtaining it as a natural emission from uranium and thorium. With the tech industry growing exponentially, global demand for helium has been increasing. This means that now is a good time to invest in helium.

The best helium stocks to buy now

Helium is a highly versatile commodity with a wide range of applications, from filling balloons to cooling nuclear reactors and MRI machines. With its increasing demand and limited supply, investing in helium stocks can be a lucrative opportunity. Here are some of the top helium stocks to consider:

Linde PLC (NYSE: LIN)

Linde PLC is a UK-based industrial gas and engineering company with a global presence. It has a diverse portfolio of gases, including helium, and a market capitalization of $143 billion. The company has a strong revenue stream, generating over $31 billion in the last year.

Desert Mountain Energy Corp. (OTCMKTS: DMEHF)

Desert Mountain Energy Corp. is a Canadian company with gas operations in the southern US, particularly in Arizona, which is known for its rich helium reserves. The company is focused on helium extraction and has made significant discoveries, positioning it as a promising investment opportunity.

Air Products and Chemicals, Inc. (NYSE: APD)

Air Products and Chemicals, Inc. is a diversified global supplier of various gases, including helium. The company has a market cap of around $51 billion and serves clients across different industries. It is known for its innovative and sustainable practices and has a strong financial standing.

Avanti Energy Inc. (OTCMKTS: ARGYF)

Avanti Energy Inc. is a Canadian company specializing in helium exploration and production in Western Canada and the US. With a constant focus on exploration and development, Avanti Energy aims to capitalize on lucrative opportunities in the helium market.

First Helium Inc. (CVE: HELI)

First Helium Inc. is a well-established Canadian company operating in the Western Canada Sedimentary Basin region. It has a substantial landholding of around 32,000 hectares and has successfully tapped into a discovery well with a 1.3% helium content. The company plans to increase production and capitalize on its findings.

Total Helium (OTCMKTS: TTLHF)

Total Helium owns North America's largest continuous helium field in Western Kansas. The company is working on expanding its operations and has active leasing and construction campaigns. While Total Helium is still in the fundraising stage, its potential makes it an attractive investment opportunity.

These companies offer a mix of established players and emerging stars in the helium industry. Remember to conduct thorough research and diversify your portfolio when investing in helium stocks, as regulatory and environmental factors can impact drilling projects.

The helium shortage

Helium is a highly versatile commodity with a multitude of uses. It is used as a coolant in MRI machines, nuclear reactors, and cryogenics research. It is also essential in the production of barcode readers, computer chips, semiconductors, LCD panels, and fibre-optic cables. However, despite its critical role, helium is facing a significant shortage, with supply struggling to keep up with the growing demand.

The primary reason for the helium shortage is the limited availability of this element. Helium is a byproduct of natural gas extraction, occurring naturally from radioactive decay in the Earth's crust. The largest reserves are found in massive underground pockets in Algeria, Qatar, Russia, and the US. In recent years, the supply from these sources has been declining, with the US, a major producer, selling off its national reserves. This has resulted in a gap between supply and demand, driving up prices and leading to concerns about potential disruptions.

The situation is further exacerbated by the lack of alternative options. Helium's unique properties, such as its extremely low boiling point, make it challenging to find substitutes. While hydrogen and neon have similar characteristics, they are not suitable replacements due to their higher boiling points and other limitations. This leaves industries heavily reliant on helium struggling to secure sufficient supplies.

The impact of the helium shortage is already being felt across various sectors. In healthcare, MRI machines, which rely on helium to cool their magnets, are facing disruptions. Hospitals and medical researchers are being forced to ration their helium usage, prioritizing critical applications like MRI scans over other important areas. The semiconductor industry, another major consumer of helium, has also experienced a decline in demand, contributing to the easing of the shortage in mid-2023.

However, the end of the latest helium shortage, dubbed "HS-4.0," may be in sight. New supply sources, such as the restart of deliveries from Gazprom's Amur plant, have added a significant boost to global supply. At the same time, the gradual replacement of older, helium-intensive MRI scanners with newer, more efficient models has helped to reduce helium demand in the healthcare sector. These factors have contributed to a reasonable balance between supply and demand, offering a glimmer of hope for industries dependent on this vital element.

While the immediate crisis may be averted, the long-term outlook for helium supply remains uncertain. With reserves potentially dwindling and new discoveries being challenging to bring online, the future of this critical element is in flux. The end of the US federal helium reserve sale and the emergence of new suppliers may shape the market dynamics in the coming years.

Why helium stocks have gone up

Helium is a highly versatile commodity with a multitude of uses, from balloons to coolant for nuclear reactors and magnetic resonance imaging (MRI) machines. It is also used in digital technology, such as high-capacity hard drives in data centres, barcode readers, computer chips, semiconductors, LCD panels and fibre-optic cables.

The price of helium has been heading higher and higher, making it an attractive investment opportunity. The supply of helium is in decline, with Qatar and the US, the top producers, facing supply issues. In addition, the US government's national reserves, which met about 20% of global demand, have been depleted. This has resulted in a global helium shortage and increased prices.

The demand for helium is expected to continue to grow, driven by its use in MRIs, electronics manufacturing, new-age airships, high-end science and engineering, space exploration, pressure/purge applications, and semiconductors. The current annual demand growth of 1.5% is outpacing the supply, putting pressure on the supply/demand balance in the long term.

Investing in helium stocks can be a way to benefit from the increasing prices and demand for helium. There are several companies that deal in helium that investors can consider, such as Desert Mountain Energy, Helium One Global, and Imperial Helium. These companies have made significant discoveries or have promising assets, making them attractive investment opportunities.

In summary, the helium stocks have gone up due to the increasing demand and limited supply of helium, as well as its versatility in various industries. The depletion of US strategic reserves has also contributed to the rise in prices, creating a favourable environment for investing in helium stocks.

The largest helium producers

One of the biggest helium manufacturers is Air Products and Chemicals Inc (NYSE: APD), a Pennsylvania-based company that offers liquid and compressed helium in various purity levels. With a broad network of storage and transfer facilities, Air Products operates across the globe and has a current market cap of $64.116 billion.

Another notable helium producer is Linde Plc (NYSE: LIN), an Ireland-based natural gas and engineering company with a market cap of $179.604 billion. Linde operates one of the largest helium plants in Ulysses, Ireland, as well as in Kansas and Qatar, producing high-grade helium of up to 99% purity.

Exxon Mobil Corporation (NYSE: XOM) is also a significant player in the helium market, operating the LaBarge facility in Wyoming. Exxon Mobil provides about 20% of the global helium production and has a market cap of $433.674 billion.

Other notable helium producers and manufacturers include Zephyr Solutions, Aditya Air Products, Pune Air Products, Aanshus Innovative Creations, and Qualitrol Company LLC.

The best helium stocks for space exploration

Space exploration is one of the many sectors that depend on helium. All major space companies, including Virgin Galactic, Blue Origin, and SpaceX, use helium to power their rockets. As such, the demand for helium is high, and it is a good investment option. Here are some of the best helium stocks to consider:

• Air Liquide S.A. (OTCMKTS: AIQUY): Air Liquide S.A. is a French company founded in 1902. It markets its products across the world, including in the Americas, Asia, the Middle East, and Africa. The company has three divisions: Gas & Services, Engineering & Construction, and Global Markets & Technologies. The Gas & Services division provides customers with gas products, including helium. The Global Markets & Technologies division focuses on new and upcoming applications for helium, including aerospace exploration.
• Imperial Helium Corp. (OTCMKTS: IMPHF): Based in Vancouver, Canada, Imperial Helium Corp. specialises in securing, developing, and operating helium properties across North America. The company was founded in 2018 and has a team of experts in the energy sector who screen for helium through thousands of wells.
• Linde PLC (NYSE: LIN): Linde is a UK-based company that manufactures and distributes gases like helium, oxygen, argon, and rare gases. It serves various industries, including space exploration, and holds a market capitalisation of $143 billion. Linde has been operating since 1879 and is one of the oldest companies in the industrial gas sector.
• Air Products and Chemicals, Inc. (NYSE: APD): Headquartered in Pennsylvania, Air Products and Chemicals, Inc. has a market cap of around $51 billion and serves clients across 50 countries. The company produces helium and provides related equipment and services. It has a long-term growth record, with steady acceleration since it went public in 1981.
• Desert Mountain Energy Corp. (OTCMKTS: DMEHF): Desert Mountain Energy Corp. is based in Vancouver, Canada, and has gas operations in the southern US. The company is developing facilities to extract atmospheric gases, including helium, from its properties in Arizona. It also has rare earth gas extraction projects in the US Southwest.
• Avanti Energy Inc. (OTCMKTS: ARGYF): Avanti Energy Inc. is a Canadian company that focuses on developing large-scale projects to extract helium deposits. The company has seen significant growth in the last year, with a 1,229% boost in stock value in the trailing 12-month period.
• First Helium Inc. (CVE: HELI): First Helium Inc. is based in Alberta, Canada, and explores and develops helium resources in the Western Canada Sedimentary Basin region. The company has successfully tapped its first discovery well and plans to increase production in the area.
• Total Helium (OTCMKTS: TTLHF): Total Helium aims to extend the largest continuous helium field in North America, located in Western Kansas. The company is also collaborating on constructing an underground helium storage facility.

While these companies show promise, it is important to note that investing in helium does not guarantee profits. It is recommended to diversify your portfolio and conduct thorough research before investing in helium stocks.

Frequently asked questions