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Helium Shortage Leaves Balloon, MRI Businesses Up In The Air

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Helium Shortage Leaves Balloon, MRI Businesses Up In The Air

The annual Bay and Algoma Busker’s Festival over the weekend in Thunder Bay, Ontario probably felt different.

It has many of the usual street fair attractions — food and drink, music and street performers. But no balloons for the kids.

Sorry kids, there just isn’t enough helium.

The Bay and Algoma festival delivered the disappointing news Thursday, tweeting that there wouldn’t be balloons, in part because of a worldwide helium shortage.

The shortage of the noble gas has been blamed for everything from poor sales at Party City Holdco Inc. (NYSE: PRTY) stores to a slowdown in scientific research.

A Northwestern professor recently said in Physics Today that the shortage of helium was putting chemists and physicists “in a crisis mode.”

Why Is There A Shortage?

Helium is one of the most abundant substances in the universe; so why is it hard to come by?

While it’s all over the universe, there are only a few places on Earth where helium is regularly extracted. A big reserve exists under the Texas-Oklahoma border and Qatar produces helium, but the supply is limited until new reserves are found.

The U.S. is the largest producer. The federal Bureau of Land Management operates a reservoir, enrichment plant and pipeline that handles nearly half of domestic demand, auctioning the helium to private companies that sell it to consumers.

The program brings in about $430,000 per day for the U.S. Treasury.

Once it’s extracted, helium is difficult and expensive to store.

Most of the shortage is because of difficulties on the supply side, though there has been an uptick in demand with growth in China, particularly in the semiconductor industry.

Helium Uses

Helium’s most common use is for cooling the super magnets used in MRI machines.

More on MRIs in a bit. But most of us are more familiar with helium as the lighter-than-air gas that fills balloons to make them rise. And that’s one of the reasons the general public is aware of the helium shortage.

When you go to Party City to get balloons for a party, and they send you away empty-handed — or empty-ballooned — that’s when it hits home.

The shortage "negatively impacted our latex and metallic balloon categories,” the company’s CEO, James Harrison, said when the company announced results in March.

Have We Seen Peak Helium?

The shortage this year isn't the first; helium is notorious for supply problems.

When American college football fans think of helium, they may remember seeing the massive release of red balloons when the Nebraska Cornhuskers score a touchdown. That tradition had to be put on hold for a time back in 2012 because of another helium shortage.

Some helium-consuming industries are starting to think about possible replacements. 

In England, the National Health Service and the huge Dutch electronics and technology company Koninklijke Philips NV (NYSE: PHG) announced this past week that one British hospital recently became the first to use a helium-free MRI machine, “virtually eliminating dependency" on the material.  

If the medical imaging industry is able to reduce helium demand, it would have a big impact: MRIs are the biggest use of helium right now.

Other large uses include providing lift for weather balloons and calibration of scientific instruments.

New Source for Party City

As for balloons, Party City’s Harrison said in March that it had reached an agreement for a new source of helium that should keep everyone’s parties flying high for the next couple of years. 

A company spokeswoman said this week that Party City is in a quiet period and couldn’t provide an update. But Harrison said in March the new source “should substantially eliminate the shortfall we are experiencing ... and improve our ability to return to a normal level of latex and metallic balloon sales.”

So while the situation remains a bit murky for MRIs and researchers, helium balloon sales may soon be taking off again.

Related Links:

Party City Pop-Up Toy Stores Could Help Toymakers Stung By Toys 'R' Us Closures

List of Companies Reaching Yearly Lows Tuesday

Posted-In: helium medical equipment Physics TodayNews Top Stories Best of Benzinga

 

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