Weekly Reports | Apr 26 2017
Sellers of spot uranium are convinced substantial buying is just around the corner.
By Greg Peel
Last week was punctuated by Easter but the uranium spot market was destined to be quiet nonetheless. Spot demand has been slow to develop throughout 2017 to date, with utilities postponing buying due to market uncertainty. This week sees market participants gather in Toronto for the annual World Nuclear Fuel Cycle conference, providing another reason to avoid the market last week.
Sellers are nevertheless working on the basis of the longer buyers stay out of the market, the greater the likelihood of substantial demand suddenly hitting the market around the same time. They were hence reluctant to lower prices last week to meet any bids.
Only three transactions totalling 300,000lbs U3O8 were subsequently concluded, industry consultant TradeTech reports. TradeTech’s weekly spot price indicator has fallen all of -US5c to US$23.20/lb.
The consultant reports several utilities are indeed currently evaluating potential spot purchases. One is seeking 750,000lbs U3O8 contained in UF6 and two others are seeking 500,000lbs and 200,000lbs U3O8 respectively.
The greater interest from utilities nevertheless remains in term markets, where longer term contract demand is now being pushed out beyond 2025 in order to lock in historically low prices. There are currently offers being sought by a number of buyers for amounts between 850,000lbs and 3.6mlbs of U3O8 for delivery periods ranging from 2019 to 2029.
TradeTech’s term price indicators remain unchanged at US$28.00lb (mid) and US$35.00/lb (long).
Uranium market participants have been awaiting the outcome of the French presidential election, given the impact the result could have on the French nuclear power industry. The far left candidate would have exited nuclear power but is now out of the race. The far right candidate is pro-nuclear but will likely be trounced in the run-off by centrist Emmanuel Macron, who wants to stick with the current government’s policy of reducing France’s electricity mix to 50% nuclear from a current 75%.
Attention will then turn to South Korea next month, where the candidates in that country’s election have all pointed to public concern over pollution and safety issues with regard coal-fired and nuclear energy production.
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