Commodities | Apr 12 2016
By Greg Peel
The World Nuclear Association and Nuclear Energy Institute hosted the annual World Nuclear Fuel Cycle conference last week in Abu Dhabi, ensuring light trading in uranium markets. Conference attendees were at least able to breathe a sigh of relief on news a High Court challenge to the first two Japanese reactor restarts was dismissed.
The Sendai units one and two are currently the only operating reactors in Japan, which once produced 30% of the country’s electricity needs from nuclear power. There are other reactors ready to restart but in each case hoops have to be jumped through to achieve approval from local and provincial governments and opposition against nuclear power remains strong in Japan. The process moves on at a glacial pace.
As such, conference attendees were lamenting the disappointment of Japan’s first reactor restarts having little impact on uranium prices. After all of Japan’s reactors were shut down in 2011, it was always assumed the restart process would spark a rebound in uranium prices from their post-Fukushima depths. But this has not been the case. Aside from the restart process moving painfully slowly in Japan, the world remains well-supplied with uranium either way.
Hence the market is devoid of any anxious end-user buying. Uranium traders and intermediaries have been hanging onto a belief since last year that utilities will soon need to enter the market but as each month goes by, utilities continue to sit on the sidelines.
One utility did pop its head through the spot market door late last week nonetheless, seeking offers for a spot delivery contract, industry consultant TradeTech reports. Otherwise only four transactions were completed totalling 450,000lbs U3O8 equivalent, with traders and intermediaries on the buy-side. The week before saw some frantic end of quarter selling from traders stuck with product, but the sellers were less desperate last week and as such, TradeTech’s weekly spot price indicator has risen US$1.00 to US$28.50/lb.
Utilities were also spotted in the mid-term delivery market, resulting in three transactions being completed. There are still several term market orders out for tender but still utilities seem in absolutely no rush to settle. TradeTech’s term price indicators remain unchanged at US$29.90/lb (mid) and US$43.00/lb (long).
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