China temporarily bans helium exports as US-Iran tensions flare again

China announced on Friday a temporary export ban on helium, effective immediately, as resumption of military conflict in the Middle East threatens to trigger new shortages of the gas critical for chip manufacturing.

Earlier this year, the U.S.-Israeli war on Iran led to helium shortages, disrupting companies globally, including in China, where the AI industry increasingly relies on domestic chips for training and running AI models. Helium is essential for heat management in semiconductor production.

The helium ban is the latest example of Beijing seeking to prevent domestic shortages of critical materials by curbing exports. It has previously imposed similar measures on fuel, fertilisers and sulphuric acid.

China is also looking to boost domestic chip manufacturing capacity and reduce the industry's dependence on cutting-edge Nvidia semiconductors that fall under U.S. export controls.

CHINA RE-EXPORTS HELIUM

China is heavily dependent on overseas helium despite efforts to expand domestic production.

Still, the export ban could squeeze global supply further because Chinese companies have increasingly acted as intermediaries, importing Russian helium and re-exporting some volumes to overseas markets, including Europe.

Analysts estimate China imports around 85% or more of its helium requirements. Qatar accounts for a major share of global helium output and has supplied more than half of China's imports in recent years.

 Helium is extracted from natural gas fields with unusually high helium concentrations and cannot be quickly manufactured from other industrial processes.

In chipmaking, it is used for wafer cooling, plasma etching, chemical vapour deposition, atomic layer deposition, lithography support and leak detection.

(Reporting by Eduardo Baptista and Beijing Newsroom; editing by Andrei Khalip)