The reason for the high price of helium welding gas is because it is not a common reserve globally and the helium is merely 0.00052% of the entire gas content present in the crust of the planet and 75% of this supply depends upon some natural reservoirs of gases in the USA, Qatar, and Russia. The cost to extract helium in Qatar’s North Field gas reservoir will be 18/m3 in 2023
(The helium value in natural gas is only 0.35 million. U.S. BLM records indicate that the federal Reserve of helium went down from 1 billion m3 in 2010 to 120 million m3 in 2023, which resulted in a record spot price of 45/m3
(2021 average annual cost 32/m³). The manufacturing of 5nm chips in the semiconductor industry (which consumes 30% of helium) requires 99.9999% ultra-high purity helium, and purification costs 62% of the selling price.
Supply chain bottlenecks have intensified price volatility, as Russia’s Amur gas processing plant (helium processing capacity is 60 million m³/year) is 18 months behind schedule, and its helium prices increased by 37% in the Asian markets in 2022. Helium welding gas of Ar/He 70/30 blend accounts for the percentage used for welding the fuselage of Boeing 787 aircraft, and one airplane occupies 240m³ helium, increasing the cost from 3.1% in 2019 to 5.8% in 2023. ASML EUV lithography machine welding employs vacuum chamber welding that requires helium protection, and its purity level needed is 99.999% as per the ISO 8573-1 Class 1 standard, with a helium cost per equipment of $120,000 and a percentage of 28% to the total welding cost.
The technical threshold for purification drives up the cost, with ASTM standards requiring weld-grade helium oxygen to be less than 2ppm and nitrogen to be less than 5ppm. Praxair uses pressure swing adsorption (PSA) technology for purification, which consumes up to 12kWh/m³ (conventional distillation is 8kWh/m³), resulting in an increase in processing costs of 6.5/m
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. For welding of NASA’s aluminum-lithium alloy rocket fuel tank, non-purity of heliumweldinggas will cause the possibility of hydrogen-induced crack in weld to rise up to 0.738/m³ to meet the AMS 2750E standard.
Usage areas demand rigid support high costs, medical MRI equipment liquid helium (-269℃) annual consumption occupies 15% of the globe, extrusion welding gas supply. After the Tesla 4680 battery laser welding transition to Ar/CO₂ mixture, weld defect ratio increased to 0.8% (0.3% for helium solution), forcing the budget structure to consider the 42% cost ratio of helium. In 2024, as the International Helium Association expects, demand in the aerospace sector will increase by 7.2% annually while supply will merely increase by 2.4%, and the price will remain over $35/m³.
The monopoly in the market is supported by the limitation of alternate technology. Helium’s ionization potential of 24.6eV is 56% higher than that of argon at 15.8eV when used in TIG welding, and an arc temperature of 18000K can be attained, and 40% deeper penetration can be achieved. Shipyard experiments revealed that the weld efficiency of 6mm stainless steel dropped by 33% with the switch to argon-hydrogen mixture welding, and the rework rate went up from 1.2% to 4.5%. Although the hydrogen mixture is 40% less expensive, the risk of hydrogen embrittleness limits its application, and SAE J standard does not allow the application of protective gases containing > 2% hydrogen for aerospace aluminum welding.
Geopolitics have affected supply stability, and the 2022 Russia-Ukraine conflict led to an increase in insurance rates on helium shipments to 1.8% of the value of the cargo (up from 0.5%) and increasing the shipping period from the Russian port city of Vladivostok to Shanghai to 35 days (from 22 days). Chinese semiconductor companies had to prepare a six-month strategic stock of helium (about 1.2 million m³), occupying a working capital of 42 million yuan. The EU Carbon Border Tax (CBAM) captures the carbon price of helium transportation in its price, per m
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Increase 1.2 environmental taxes.
Storage and transport losses incur additional costs, liquid helium (-269℃) in the ISO tank daily evaporation rate of 0.8%, the efficient utilization rate following long distance transportation is only 82%. Linde estimates 25% of the total cost of transporting helium from Qatar to Germany from evaporation losses and reliquefaction energy. When high pressure cylinders (20MPa) are used by welding workshops, valve leakage results in an average annual loss rate of 3.2%, and the true cost of gas consumed by small businesses is 9.7% higher than the quoted cost.
The oligopoly trend in the market maintains prices high, and the three major gas corporations (Linde, Air Chemical, and Air Liquide) control 78% of the world’s supply of helium welding gas, and the average gross profit margin of the industry will be 41.7% in 2023. Antitrust agency data show that helium prices in the Asia-Pacific region have a 32 percent channel markup, compared with 18 percent in North America. The buying records of an auto parts factory indicate that the direct buying from gas fields is to reduce the costs by 14%, though the 5000m³ (about $160,000) minimum order quantity of accepted orders inhibits small and medium-sized enterprises from exercising bargaining power.
Technological advancements are likely to alleviate the pressure, with membrane separation technology from the Southwest China Research Institute of Chemical Industry lowering the energy usage of helium purification to 4kWh/m³, and the 2025 mass production target lowering the price to 26/m
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. JAXA’s helium recovery system hit a cost of 855.8 million in a rocket welding workshop.