Uranium Week: Mid-Term Prices On The Rise

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By Greg Peel

Uranium spot market activity is on the rise, industry consultant TradeTech reports. Last week saw seven transactions concluded totalling 1.1mlbs U3O8 equivalent. Traders accounted for the majority of the buying, with intermediaries and producers on the sell-side.

Increased interest from traders implies increased speculation of increasing prices. Sellers have backed off their offer prices and buyers are now seemingly more willing to pay up. TradeTech’s weekly spot price indicator has risen US50c to US$37.25/lb.

While utilities may be absent from the uranium spot market, increasing spot prices reflect increasing term market interest from utilities. While only one transaction of less than 500,000lbs U3O8 was reported in the term market last week, TradeTech reports three utilities are currently evaluating offers for a total of 6.5mlbs for delivery periods beginning in 2017.

Demand in term markets is robust, TradeTech reports, although the concentration is in the mid-term delivery period. Longer term demand is less dominant at this time. Thus while having lifted its spot price indicator by US50c, the consultant has also lifted its mid-term price indicator by US$1.75 to US$40.00/lb. But the consultant’s long-term price indicator has been trimmed by US1.00 to US$44.00/lb.

In news this week, Russia’s state-owned nuclear energy company Rosatom has sold its Honeymoon uranium mine in South Australia to Australian-listed Boss Resources ((BOE)), having not that long ago purchased the mine from Canada’s Uranium One. Honeymoon is one of only five government-sanctioned Australian uranium mines, but weak uranium prices have seen development suspended for the past two years.

Presumably it didn’t make much sense to the Russian government to continue the Honeymoon when weak oil prices have seriously impacted on government finances.

In other news, Kazakhstan has now opened up a uranium trade route to North America following a deal with China. State-owned Kazatomprom has signed a deal that sees Kazakhstan and China jointly procuring temporary storage services for uranium concentrate to provide for transit through to western ports in Canada and the US.
 

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