The war in Iran is not only shaking energy markets. It is also weakening a far less visible but equally strategic resource: helium. Indispensable for cooling high-tech equipment, this gas is suffering a supply shock following the halt of natural gas exports from Qatar, which accounts for a third (34%) of global production. The primary distributors are the industrial gas giants Air Liquide, Linde and Air Products.

Often associated with party balloons, helium is actually at the heart of numerous critical industries. It stabilizes temperatures in semiconductor manufacturing, enables MRI machines to operate, and secures rocket launches. However, it is rare on Earth: trapped in small quantities within certain natural gas deposits, it is time-consuming to produce. Increasing supply rapidly is impossible. Consequently, tension is mounting in an already tight market. Industrial players, usually covered by long-term contracts, are turning to the spot market, where prices have more than doubled, to guarantee their supplies. "It is the black swan everyone dreaded," Cliff Cain of Pulsar told the Wall Street Journal.

But is this somewhat excessive?

What is certain is that Iranian strikes damaged gas facilities at Ras Laffan in Qatar, reducing helium exports by 14% and suggesting years of repairs. Even in the event of a rapid de-escalation, the effects will be lasting. Air Liquide warned several days ago that its helium supply would be penalized by the situation.

Nevertheless, the situation is not critical in terms of supply: it is primarily prices that are affected by the rise in risk. Bernstein estimates that the risk of disruption for semiconductors remains low thanks to several buffers: significant industrial inventories (up to 6 months), high recycling capacity (75%-90%), cavern storage and the ramp-up of Russian production.

Air Liquide and its Helium Cavern

"With the situation in the Middle East and the attacks last week on the natural gas field, there is currently a helium shortage," conceded Armelle Levieux, Vice President of the Air Liquide Group, to Reuters last week. At this stage, the French giant has reallocated its supply via other geographical zones. Air Liquide is, for example, a key supplier to TSMC, providing for over 60 facilities in Taiwan.

Furthermore, the group possesses a "cavern" dedicated to helium storage in Germany. Operational since 2016, it is located in Gronau-Epe (North Rhine-Westphalia). At the time, it was a world first: storage takes place 1,300 meters underground in a salt cavity managed by Air Liquide, where natural brine is used to adjust storage volume. Ten years ago, the group emphasized that it could store "more than a year's worth of its helium supply" there.

Note that Air Liquide generates approximately 2.5% of its revenue from helium (the most exposed group in the sector is Air Products, which derives 7.5% of its revenue from this gas). Bernstein calculated that a 10% increase in the price of helium would improve the French company's net profit by 1.1% by year-end, ceteris paribus. This is relatively low. The research firm notes that the group is structurally well-positioned, notably thanks to strategic storage in German salt caverns, which strengthens its ability to meet customer commitments and capture price increases, particularly on the spot market, even if a large portion of volumes is under contract. Helium tightness is therefore generally positive but marginal for Air Liquide.

Regardless, the French group's defensive virtues and rumors of shortages have benefited the stock since the beginning of the year. The share price has gained 11%, significantly outperforming the Stoxx Europe 600 (-1.9%) and the CAC 40 (-4.6%). Analysts, who are always somewhat uneasy about the stock's valuation, seem to be taking advantage of the windfall. In recent days, Morgan Stanley and Kepler Cheuvreux upgraded the shares, while raising their target prices. The average 12-month target price from the S&P Capital IQ consensus is currently €196 (ranging between €168 and €216). This morning it was trading at €177.66, after five consecutive sessions of gains.