May 4, 20222 min
Air Products stated that its other costs are higher due to the combination of investments for future growth, planned maintenance and external factors.
One example that Air Products has invested in is its helium storage cavern to help provide reliable helium supply to its customers globally. This investment increased its cost now, but it expects to generate significant value from this investment in the future. It also stated that it is the world leader in helium and sees the market as "a bit tight"
Transcript quote from Q1'22 results:
Our helium business, it's a business that we don't usually talk about the details of that, but -- in terms of how much contribution and all of that. It's a great business. We are the world leader on that. The fact of the matter is that the world expected that a very large projects that will produce helium, called the Amur project in Russia, would be onstream in 2021. And that would put a lot of helium in the market. And therefore, it would have a negative price -- negative effect on pricing. That was the expectation. In starting up those plants in Russia, they had 1 explosion in 1 train, and then 6 months later, they had an explosion in the second train. So nothing came -- no helium came out of Russia in 2021, and nothing has come out of it in 2022 yet.
But now on top of the fact that they have to repair those units because of the damage that was done, now you have the issue of the sanctions on Russia. So I am not sure that even when they are ready to bring that material to the market, how much of it can they bring on the market considering the sanctions. So as a result of all of that, you would expect that the market for helium would be a little bit tight, and that is what we see.