10th September 2018
Lab Gas Price Bulletin September 2018
Costs are going to rise significantly throughout the global helium supply chain.
Laboratories which use helium as part of their operations are already aware that the helium supply chain is volatile, with occasional supply interruptions and regular price increases.
Prudent laboratories should now expect another round of price increases imminently (previous increases are detailed here and here), due to the results from the U.S Bureau of Land Management (BLM)’s latest crude helium auction which took place on the 31st of August 2018. The BLM controls around 50% of the global helium supply, and its latest FY 2019 crude helium auction was dramatic, with the average price per million standard cubic feet reaching $279.95 compared to $160.64M a year ago. This was the BLM's last auction as its federal reserve of crude helium is set to reach the minimum level of 3 billion cubic feet mandated by legislation.
In another unexpected turn of events all of the 12 lots on sale, in differing sizes of 25, 15 and 5 MMscf, were purchased by a single buyer. Although they were met by aggressive bidding from Praxair and Matheson, Air Products was the highest bidder every time, securing themselves a monopoly on the auction lots.
With Air Products paying a premium for their monopoly it is not unreasonable to expect that their helium prices will increase in the near future. However this is likely to be the case across the board anyway as, after the auction, the BLM announced that its Posted Price, which is often used as a pricing peg for industry contracts, would increase by $56/MCF from $119/MCF to $175/MCF for FY 2019.
Now laboratories are faced with the prospect of absorbing the significant price increases which are expected or reducing their use of helium gas. Fortunately, for labs which use helium as GC carrier gas, this doesn’t have to be a difficult decision. For GC carrier gas, hydrogen offers laboratories an equivalent level of sensitivity to helium but allows for faster speed of analysis. Moreover, hydrogen can be generated on demand using a gas generator, so its price is never subject to market influence as it is not a traded commodity.
Switching from helium to a hydrogen generator also removes dangerous compressed gas cylinders from the laboratory and improves efficiency as, unlike cylinders which can run out mid-analysis and require frequent changeovers, a hydrogen generator will produce a constant, uninterrupted supply of gas to your GC, for as long as your analysis requires. The gas supplied from a hydrogen generator will always be of a consistent purity, another added benefit when compared to cylinders which have increasing levels of contaminants present in the last 10% of gas in the cylinder.
It is clear that the results of the FY 2019 BLM crude helium auction will have an impact on laboratory helium supply in the near future, with prices likely to increase. To future-proof their gas supply and manage costs, it is advisable for laboratories to switch from helium to alternative gas supplies wherever possible. Where laboratories currently use helium as GC carrier gas, Peak Scientific recommends switching to a hydrogen gas generator to control costs, improve safety and increase efficiency.
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