Russia has got helium

If anybody is worried there’s plenty of helium in Russia:

“The international issues surrounding helium shortages, which continue to affect businesses around the globe, could soon be a forgotten memory after a spokesman from a Russian company highlighted plans to fill the void left by the US’s plans to sell-off all of the country’s reserves to repay a $1.3 billion debt to the US Treasurey – which has been ordered by US law”

It’s pretty much old news that the price of helium is going up. Currently AP are not supplying for a couple of weeks and BOC have whacked an instant surcharge on all cylinders.

I found this comment on Rapid Industrial Gases site:

“Due to the ongoing global Helium issues, Air Products have asked Rapid Industrial Gases Ltd to not take any further orders for Balloonium/Heligas/Balloon Gas, used for inflating balloons. Please phone Air Products on 08457 02 02 02 for all queries or orders”

To be fair to BOC at least they charge a fortune for cylinders on their own site. Looking at their website a ‘T’ Size costs £86.00 plus a £13.05 collection charge….. that’s £96+vat.

So the simple solution is to pass the price onto your customer.

If your a 100% balloon decorator the price does not make a big difference – a bouquet of 5 balloons will only increase by about 30p in your cost price. If you hire the stuff out like I do then the increase does impact.

So….. if I spend £5k per month on gas and the price goes up 15% then it will cost me £750 a month – and that’s a lot to find from nowhere. But – there’s a delivery charge on every transactions so it won’t go up 15% in total.

The worrying thing is – if the prices go up 15% in August and the cylinder surcharge remains in place – that will be a 30% price increase.

So no choice but to pass on the costs.

It’s not too bad for me because I’m a retailer not a wholesaler, so I make a decent margin. It’s worse for wholesalers who make a small cut and the vat on a cylinder is probably more than the profit.

It’s also worse for manufacturers like Amscan. Imagine if you manufacture a product, employ 100′s of staff…. and the stuff that fills the product is starting to have supply issues, what a nightmare.

It’ll be interesting to see how things pan out over the next few years.