An update from the air separation industry, dated 20170615: Seven countries break ties with Qatar; turmoil in China’s helium market

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Seven countries cut ties with Qatar; China’s helium market experiences turmoil. On June 5, the seven countries announced that they would sever relations with Qatar and impose restrictions on its maritime, aerial, and land transportation. Qatar is China’s largest source of helium, and this has currently caused turmoil in the domestic helium market. Since the successful commissioning of Qatar’s helium purification plant with an annual capacity of 38 million cubic meters in 2014, Qatar has quickly become a major source of helium imports for China. This incident has caused turmoil in the domestic helium market; most major importers have restricted shipments abroad, and there is a strong tendency for price increases in the market. 1. In 2017, helium imported from Qatar accounted for 49% of the total. According to customs data, the main sources of helium in China are Qatar, the United States, and Australia, with Qatar accounting for as high as 49% of the total supply. Foreign companies such as Iwata, Air Liquide of France, Air Products, and Praxair all import them. If this incident makes it difficult to transport helium out, it will undoubtedly be a major boon for China’s current helium market, where supply exceeds demand. 2. UAE restricts Qatarian ships from docking. On June 5, 2017, Bahrain, the UAE, Saudi Arabia, Egypt, Yemen, Libya, and the Maldives announced the severing of ties with Qatar, citing Doha’s support for terrorism and extremism, its hostile policies, and its interference in the affairs of other Arab countries. Qatar is facing political and economic isolation from its neighbors, who have not only decided to sever diplomatic ties with Doha but also banned ships flying the Qatar flag from docking in the ports of Saudi Arabia and the UAE. Before March 2017, helium exported from Qatar to China was mainly shipped via the United Arab Emirates as a transit country; however, starting in April 2017, customs data showed that helium exported from Qatar to China was not transported through the UAE any longer, but was sent directly to China. Therefore, we boldly speculate that the contradictions have been brewing for some time, and Qatar may already be seeking ways to address them. 3. Air Liquide from France had the highest import volume from Qatar, while Iwaki relied the most on Qatar. According to customs data, from January to April 2017, Air Liquide from France was at the top in terms of helium imports from Qatar, accounting for 33% of the total imports from that country; followed by Praxair, Iwaki, Air Products, Linde, and Messer. Among them, Iwaki is the most dependent on helium in the Qatar region. Therefore, if helium exports from the Qatar region are hindered this time, Iwaki, Air Liquide of France, and Praxair will be significantly affected. 4. The factory in Qatar is actively seeking ways to export its products. Currently, the main importing companies have restricted shipments to intermediate traders, and there are calls within the market for price increases. However, reports suggest that Qatari manufacturers are actively seeking solutions, looking to ports in neighboring countries with which relations have not been severed for exports ； On the other hand, due to the limitations of its small ports, exports are carried out by transporting goods in small ships first and then transferring them to larger ships. Regardless of the option chosen, it will take time to raise the funds, and results are expected to be available in the near future. Zhuochuang believes that it is still unclear how long the diplomatic rupture with Qatar will last; the United States and several other countries have already stepped in to mediate, and there are reports that Saudi Arabia, the UAE, Egypt and other nations are drafting a \"list of conditions\" for restoring normal diplomatic and economic relations with Qatar. Given the current situation, the maritime routes in the Qatar region have not been completely blocked, so it is still too early to say that helium will be unable to be exported. Even though it is difficult to transport helium from the Qatar region, the production of helium in the United States and Australia remains considerable at present. It is advisable to approach the market rationally and avoid stockpiling at high prices.