Helium market struggles continue to impact Air Products' earnings, causing significant challenges.

Air Products, a leading industrial gas company, is grappling with a difficult period in the helium market. The company's earnings have taken a significant hit, with helium headwinds reducing its earnings per share by around 55 to 60 cents this year.

CEO Eduardo Menezes of Air Products has expressed concerns about the current conditions in the helium market, questioning whether they represent a cycle or a structural change. The CEO's sentiments suggest that the challenges faced by Air Products in the helium market may not be temporary.

The helium market's vulnerability to LNG supply and shifting demand dynamics has made it prone to future supply crises. This instability is a cause for concern for companies like Air Products, which are heavily reliant on the helium market.

The US Bureau of Land Management, once a significant source of helium, has become less relevant in the market. Significant helium sources associated with the US Bureau of Land Management currently include federal helium reserves and private companies operating in helium-rich fields in the United States, such as those in Texas, Wyoming, and Utah. Companies like Air Products and Linde are major producers and could be considered potential alternatives in case of future supply shortfalls related to the BLM's management.

Air Products' third-quarter operating income declined by 4% year-on-year to $374 million. This decline was attributed to higher maintenance and depreciation costs, project exits, and lower helium demand. However, stronger pricing in non-helium products partially offset the impact of lower helium demand on the company's third-quarter operating income.

Despite the partial offset, the helium market's weakness is expected to continue negatively impacting Air Products' earnings. The company has warned that the helium market's weakness will continue to negatively impact its earnings.

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