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Uranium Week: Not Dead Yet

Weekly Reports | Sep 05 2017

News of a decision to push ahead with the construction of two new reactors in the US brought some relief to the uranium market last week.

By Greg Peel

There was some relief in the US nuclear power industry last week when Georgia Power recommended to the Georgia Public Service Commission that the construction of Vogtle units 3 and 4 should continue. Completion of the new plants has been in doubt since partners in a project to build two new plants in South Carolina decided to abandon construction.

That decision was not an easy one given substantial funds had already been spent, but ultimately the partners could not see any commercial viability in continuing to push ahead in the face of competition from cheap gas-fired power generation.

But Georgia Power and its partners would like to go ahead, prompting a rare spark of enthusiasm in the spot uranium market last week. Volumes in the last week of August were stronger than the rest of the month, with industry consultant TradeTech reporting 1.1mlbs U3O8 equivalent changing hands. Utilities were among the buyers and producers among the sellers.

Trading was nevertheless volatile, with prices ranging from US$19.85 to US$20.50 on differing delivery timing and location, and form of ore. Several utilities signalled their interest in buying under the US$20 mark, but sentiment swung on the news of the Georgia Power decision.

TradeTech’s spot price indicator ended the week up US5c at US$20.25/lb.

Flat August

August saw 31 transactions totalling 3.3mlbs U3O8 equivalent, roughly in line with July volumes but slightly below the five year average for August.

Interest in term markets remains steady and is expected to increase in coming months, but then it appears the market remains ever hopeful. With buying interest yet to build as expected, competition from sellers to secure deals is increasing and offers are being lowered as a result.

TradeTech’s mid-term price indicator has fallen -US10c to US$24.30/lb and the long-term price indicator has fallen -US$1.00 to US$31.00/lb.

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