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Uranium Week: Another Month Of Stasis

Weekly Reports | Oct 03 2017

Another month has gone by in which the uranium spot price has been unable to break away from the US$20/lb mark.

By Greg Peel

In positive news for the nuclear industry, the US Department of Energy last week conditionally committed US$3.7bn of loan guarantees to the owners of Plant Vogtle in Georgia, on top of US$8.3bn already committed, in order that construction of units 3 and 4 may continue.

The Palisades plant in Michigan will now remain in service until 2022, having previously been slated for shutdown in 2018, and units 1 and 2 of the South Texas project will continue to operate until 2047-48 under renewed operating licences granted by the US Nuclear Regulatory Commission.

In Japan, the mayor of Ohi last week consented to the restart of Kansai Electric’s Ohi units 3 and 4. With local government approval secured, restart now needs to be secured from the government of the Fukui prefecture.

On The Spot

The spot uranium market did enjoy more positive sentiment early in the week. The spot price rose to US$20.60/lb mid-week before fading away thereafter. Industry consultant TradeTech’s weekly spot price indicator rose US55c to US$20.40/lb. Seven transactions were concluded totalling 700,000lbs U3O8 equivalent. Utilities were among the buyers.

Over the month of September, 36 transactions totalling 4.1mlbs U3O8 equivalent were concluded. The month-end price of US$20.40/lb is up US15c from the end of August.

The spot price remains -23% below the 2017 peak price of US$26.50/lb booked in February. The year’s low remains US$19.25/lb, booked at the end of May, but the spot price has been unable to trade above US$21/lb since that time. Rather, it has simply gyrated around the US$20/lb mark in painfully incremental moves.

It continues to be a case of utilities seeing US$20/lb as being the line in the sand under which they are prepared to pick up material, but over which they are not in any hurry.

Term Markets

There has been, nevertheless, a bit of movement in term markets. Increasing utility interest has seen TradeTech raise its mid-term price indicator by US20c to US$24.50/lb – the first increase in a long time.

Alas, while longer demand remains steady, TradeTech’s long-term price indicator has fallen by -US1.00 to US$30.00/lb.

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