Weekly Reports | Oct 24 2017
Shinzo Abe’s emphatic victory in the Japanese election is a relief for the uranium industry.
– Anti-nuclear party fails in Japan
– Spot market demand remains subdued
By Greg Peel
The result was as expected, but nevertheless the supply side of the global uranium industry will be breathing a sigh of relief that Shinzo Abe’s LDP has cruised to victory in the snap Japanese election held on the weekend. The LDP scored a “super majority” of more than two thirds of the seats in the lower house.
Abe was able to take advantage of both the North Korea scare and the fact his right wing opponents had fractured into two parties. The newly formed Party of Hope managed only to attract votes away from the former opposition, while failing to win as many seats as the party quickly formed out of the liberal rump.
Two primary policies of Party of Hope leader Yuriko Koike, governor of Tokyo, were an increase in sales tax and the phasing out of nuclear power by 2030, balanced by an increase in renewables in the mix. While anti-nuclear policies garner popular support in Japan, Shinzo Abe is keen to restart reactors as soon as possible to alleviate the hefty cost of importing fossil fuel substitutes in the meantime.
While in the six years since Fukushima only five of more than 40 Japanese reactors have reached the point of restart, the number of reactors moving along the arduous approval track is quietly increasing.
Demand Fails to Excite
Over in South Korea, two new partially built reactors were last week approved by the government for completion.
In the US, a new bill was introduced to the Ohio legislature that seeks to provide subsidies for two nuclear power plants in that state, allowing nuclear energy to compete with cheap gas-fired and subsidised renewables.
The news from the demand-side was thus positive for uranium producers last week, but it was unable to inspire any excitement in uranium markets. Industry consultant TradeTech reports that while sellers in the spot market are beginning to thin, those remaining showed more willingness to lower prices last week.
Four transactions totalling 500,000lbs U3O8 equivalent were reported last week. TradeTech’s weekly spot price indicator has fallen -US45c to US$20.20/lb. The spot price has now traded between US$19.50 and US$20.75 for almost five months.
No transactions were reported in uranium term markets last week. TradeTech’s term price indicators remain unchanged at US$24.50/lb (mid) and US$30.00/lb (long).
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