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Uranium Week: Finally, An Uptick

Weekly Reports | May 23 2017

By Greg Peel

While there were no transactions reported in term markets last week, utility interest in term contracts remains steady, industry consultant TradeTech reports. TradeTech’s term price indicators remain unchanged at US$27.00/lb (mid) and US$35.00/lb (long).

Little of that interest is finding its way to the spot market nevertheless. That said, the mere three transactions reported in the spot market last week, totalling 350,000lbs U3O8 equivalent, did manage to push TradeTech’s weekly spot price indicator up US25c to US$21.50/lb, representing the first weekly rise in price in nearly two months.

Global Uranium

Last week saw the restart of Kansai Electrics’ Takahama unit 4 reactor for the first time in fifteen months, following the lifting of a court injunction. Takahama unit 3 will restart operations in July, which would bring to five the number of reactors in operation in Japan.

An additional 21 reactors are being assessed for restart by the regulator.

The Indian government has announced plans for Indian companies to build ten new reactors in the country as a means of boosting not only nuclear capacity but the Indian economy. The country already has plans to build reactors aided by Russia and Western companies.

The Chinese and Turkish leaders have met and agreed to accelerate plans for the Chinese to build Turkey’s third reactor. China has also met with Saudi Arabia to discuss construction of the first nuclear reactor in that country.

Paladin Energy

China is also presently involved in shoring up its investment in uranium production. Australia’s Paladin Energy ((PDN)) has conceded to allow an independent valuation of its flagship Langer Heinrich mine in Namibia rather than try to fight China’s CNNC in court at great expense. CNNC will likely exercise its option to acquire the other 75% of Langer Heinrich it doesn’t own.

Paladin has been working with its bondholders on a financial restructure on the assumption the option is exercised. The company owns the Kayelekera mine in Malawi but that’s currently under care & maintenance pending improved uranium prices. Other assets include interest in uranium projects in Western Australia and Canada.

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