North American Helium Expands Helium Unit in Canada, Further Boosting Production Capacity

Helium prices in the North American market continued to stick on their inclined phase as the demand from the automotive and aerospace sectors increased. The Helium demand outlook has surpassed the supply availability in the domestic market, proportionally raising the price range. To complete the assigned target from the domestic and international markets, the US is elevating its production capacity of Helium. North American Helium has successfully launched its seventh Helium purification facility near Ponteix, Saskatchewan, a Canadian Province. These units initially already have a Helium production capacity of 22 million cubic feet/year, and there are plans to expand further in 2024 due to their ongoing drilling success. Good news for the company and the potential buyers occurred as the facility's startup occurred about a month ahead of the company's initial estimate.

In the previous month, US producer prices rose more than anticipated, primarily due to increased expenses for energy and food products accompanied by the ascending demand from the Asian market. However, the report also revealed that the underlying inflationary pressures at the manufacturing level were diminishing, providing an opportunity for the Helium suppliers to gain better profit margins.

As stated by the Helium plant officials, this unit's setup is crucial because of the challenges posed by an increasingly imbalanced supply and demand situation in the Helium market amidst the rising demand for semiconductor manufacturing units.

North American Helium currently accounts for more than 5% of North American Helium production, becoming a major supplier for the Asian market. Snyder also expressed the company's commitment to expand its potential area to supply more than 20% of North American Helium demand. On the other hand, the consumer price index data for the previous month has showcased a slight inflation rate, significantly impacting the overall price scenario of Helium. Another factor inclusive of the reason for further changes in the US economy is whether the Federal Reserve will opt to raise interest rates, particularly in light of the rising US Treasury yields and the ongoing conflicts in the Middle East.

The company is on track to complete its most extensive drilling program to date, with around 30 wells scheduled for drilling by the end of 2023. The North Helium invests in seismic studies and facilities to ensure a seamless and scalable drilling program that can swiftly adapt to discoveries and construct facilities without logistical delays. As per ChemAnalyst, Helium prices may continue to fluctuate positively, accompanied by the inclined demand and tight supply chain.