Wednesday 25 August 2010

Time to invest in helium?

One for the commodity punters: the Daily Mail reports on the potential price boom in helium:

The world's biggest store of helium - the most commonly used inert gas - lies in a disused airfield in Amarillo, Texas, and is being sold off far too cheaply.

But in 1996, the US government passed a law which states that the facility - the US National Helium Reserve - must be completely sold off by 2015 to recoup the price of installing it.

This means that the helium, a non-renewable gas, is being quickly sold off at increasingly cheap prices, making it uneconomical to recycle [...] The US stores around 80 per cent of the world's helium and so its decision to let it go at an extremely low price has a massive knock-on effect on its market. [...] The only way to obtain more helium would be to capture it from the decay of tritium - a radioactive hydrogen isotope, which the U.S. stopped making in 1988.

The article says that because of the too-low price, it's being used very much faster than it can be replaced and reserves will be used up in 25 years. Professor Robert Richardson of Cornell University is arguing for a return to the free market in this commodity.

According to this site, major companies supplying helium in the US are Air Products (NYSE: APD) and Praxair (NYSE:PX).

Too exciting for me as an investor, and besides I don't know when in the next 25 years the market surge might start, if at all. But it's another story in the saga of finite world resources.

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