Commodities | Mar 12 2013
By Andrew Nelson
It’s almost two years now since the Fukushima nuclear disaster and Japan still hasn’t restarted its nuclear power capacity. And what’s more, it probably won’t happen this year because of the country’s push for new safety measures. Prime Minister Shinzo Abe told the Japanese parliament as much last week, saying safety approval on the new guidelines will be the first step and it won’t be bypassed.
With Japan still well and truly on the sidelines, the rest of the world is left to pick up the slack. A recent International Atomic Energy Agency (IAEA) report has called 2012 the year of return to growth as far as global nuclear power generation capacity goes. The report shows that 437 nuclear power reactors were now operating. This is two more than in 2011. Total electricity generation from nuclear power rose 3.7 gigawatts to 372.5 gigawatts, compared to a drop of seven gigawatts in 2011. It’s not much, but it’s something.
Construction work has also kicked off on seven new reactors, four of them in China and one in South Korea, one in Russia and another in the United Arab Emirates, according to the IAEA's Nuclear Technology Review.
The IAEA also noted that a number of countries are planning to extend the lifetime of nuclear plants, with growing interest also increasing in small and medium-sized reactors, which are cheaper to build. Overall, the IAEA sees growth of anywhere between 23% to 100% in nuclear power capacity by 2030.
Activity in the spot uranium market was steady, if not exciting last week. There were seven deals that saw some 800,000 pounds of uranium change hands. That’s three more deals than last week, although 100,000 pounds less stock changed owners.
Buyers and sellers alike had been sent scattering a month back on news Japanese utilities were looking to sell down stock. It is now starting to look like the report may have been off the mark and buyers are cautiously starting to re-connect with the market. Industry consultant TradeTech reports the buying is still pretty much discretionary and is thus highly price sensitive.
TradeTech’s Weekly U308 Spot Price Indicator is now at US$42.25 per pound, which is up $0.25 from last week’s price.
There was one deal concluded in the term market, although there was no new demand to fill the gap. Still, TradeTech does note there are several utilities expected to enter the term market in coming weeks. In the meantime, there is no change to TradeTech’s Mid-Term and Long-Term U3O8 Price Indicators, which stay put at US$46.00/lb and US$57.00/lb.
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