The conflict between Iran and the United States may have further escalation intentions. Qatar's helium supply may be affected to some extent, and the Chinese helium market should be closely monitored.
Recently, there is a possibility of further escalation in the conflict between Iran and the United States. Qatar is the main source of helium gas for our country. If the conflict escalates and Iran blocks the Strait of Hormuz, it will inevitably lead to further shortages of helium gas, which will benefit the helium market.
1. Conflict escalation
After the commander of Iran's Islamic 'Holy City Brigade', Qasim Soleimani, was targeted by the US military on the 3rd, Iran began to retaliate on the 8th. On the early morning of the 8th, the Iranian Islamic Guard launched "dozens of missiles" at the Assad Air Base in Iraq where US troops were stationed, with the operation code named "Soleimani Martyrs Operation". On the morning of the 8th, Iranian Foreign Minister Zarif stated on social media that Iran will take appropriate self-defense measures and will not seek escalation of the situation or war.
US President Trump posted on social media, "Everything is fine! Iran has launched missiles at two military bases in Iraq. We are currently assessing casualties and losses. So far, everything is fine! We have the strongest and most well-equipped military in the world! I will make a statement tomorrow morning
2. Qatar is the main source of helium gas for China
According to customs data, from January to November 2019, China imported 2367.1 tons of helium gas from Qatar, accounting for as much as 65%, ranking first. The import volume to the United States is only 863.6 tons, accounting for 24%. According to Zhuochuang Information, since the commissioning of the Qatar Phase II facility in 2014, Qatar has replaced the United States as the main source of helium gas in China. Due to the scarcity of helium resources in the United States, the proportion of China's imports of helium from Qatar is gradually increasing.
3. Geopolitics influences the market
Multiple events have proven that geopolitical risks are an important factor influencing the rise and fall of helium market prices. On June 5, 2017, the seven countries announced the severance of diplomatic relations with Qatar and imposed restrictions on Qatar's sea, air, and land transportation. Affected by the Qatar diplomatic break, the price of helium gas in the Chinese market has significantly increased, with an average price of 572.1 yuan/bottle for bottled 40L high-purity helium gas, a month on month growth of up to 43.4%.
This time, the escalation of the conflict between Iran and the United States may cause further chaos in the Middle East region. At present, there are reports that some US military aircraft have taken off from the United Arab Emirates. If they launch an attack on Iran, Iran will also launch an attack on the United Arab Emirates. As is well known, Qatar's helium supply is mainly transported through the United Arab Emirates. If the conflict escalates, it may to some extent affect the transportation of Qatar's helium supply, thereby exacerbating the global shortage of helium supply.