Uranium Week: Russia Back In The Frame

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By Greg Peel

The uranium spot market did finally see a response last week to the supply-side disruptions announced two weeks earlier, coincidently, by Australian listed producers BHP Billiton ((BHP)) and Rio Tinto ((RIO)). Six transactions totalling 600,000lbs of U3O8 equivalent were conducted, industry consultant TradeTech reports, and prices pushed higher through to week’s end before demand once again stalled.

TradeTech’s spot uranium price indicator finished the week up US40c at US$38.65/lb.

New demand did emerge in the spot market nevertheless, with one US utility seeking offers for 200,000lbs. One transaction was reported in the mid-term market but while there remains much interest in term contracts from utilities, many are looking to off-market direct transactions with suppliers in order not to fuel price rises in the open market.

This has not stopped TradeTech lifting its mid-term price indicator by US$1.25 to US$42.50/lb. The consultant’s long-term indicator remains unchanged at US$50.00/lb.

Last week also brought the end-of-month and TradeTech notes a total of 4.8mlbs of spot market transactions, up from 2.5mlbs in January. The consultant settled its month-end spot price indicator at US$38.50/lb, down US15c from week-end. Four transactions totalling less than 1mlbs were recorded in the term markets in February.

France has reiterated its commitment to reducing the nuclear power contribution to the country’s energy mix to 50% from 75% by 2025. Meanwhile, the EU has announced plans to create a single “energy union” representing the 28 member states, in order to circle the wagons and reduce reliance on Russian gas imports. The union would be committed to reducing the level of fossil fuel consumption and focused on alternative energy sources, but it is unclear where this leaves nuclear power.

France is looking to cut its nuclear power exposure while Germany intends to close down its reactors altogether, while the UK is building new ones.

Whatever the case, Russia is back in the frame again following the lack of promised ceasefire in Ukraine. The US and Europe have threatened to further increase sanctions on Russia, and Russia has already threatened to cut off gas supplies to Ukraine as a response. This implies cutting off all of Europe, as European imports flow through Ukraine.

Talk of any fresh sanctions also brings back the spectre of disruption to the uranium market, in which Russia is the world’s biggest supplier of enriched uranium.
 

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