Weekly Reports | May 02 2017
Sellers tried to entice buyers with lower spot uranium prices last week, but with little success.
By Greg Peel
Last week uranium market participants gathered in Toronto for the annual World Nuclear Fuel Cycle conference. In previous years spot market activity has been buoyant following the conference, industry consultant TradeTech notes, given participants meet and greet and generally gee each other up. But not so this year.
This year was a dour affair as discussion centred on a lack of positive news on the demand front and more than sufficient near-term supply.
US Department of Energy
There was at least some positive news on the supply front last week. The US Department of Energy announced it would release up to 800mt of uranium contained in UF6 in 2017. This is far from good news, in isolation, for uranium producers, but it represents the lower of the four quantity options being considered by the DoE. The department suggests the sale will not have any materially adverse impact on the industry.
The industry has been crying foul for a couple of years now at the US government’s decision to offload excess uranium stockpiles into a struggling market. If the government was not prepared to cease and desist altogether, at least it could be more transparent and measured in its dumping. The DoE took criticism on board, and this is the result.
The announced sale comes at a time when the market is suffering from “a distinct lack of buying interest,” as TradeTech notes. As last week came to a close, sellers attempted to lure in buyers with lower spot prices but only three transactions were concluded, totalling 400,000lbs U3O8 equivalent.
Trade Tech’s weekly spot price indicator is down -US70c at US$22.50/lb.
Weak April
The end of the week also marked the end of the month. April saw 2.3mlbs U3O8 changing hands in a total of fifteen transactions. There was some minimal utility interest on the buy-side but otherwise intermediaries and speculators made up of the bulk of both sides of trades.
April also saw three transactions in the 2017-30 delivery period concluded, totalling 10mlbs U3O8, with utilities the buyers. Term market interest, by contrast to spot, remains strong and a number of utilities are presently evaluating offers. Spot traders have pinned their hopes on such interest affecting a return to upside for spot prices, but this is yet to eventuate.
Indeed, TradeTech’s mid-term price indicator has fallen to US$27.00/lb from US$28.00/lb at end-March. The consultant’s long-term indicator remains unchanged at US$35.00/lb. At US$22.50/lb, the weekly spot price indicator is down -US75c from end-March.
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