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Uranium Week: No End In Sight

Weekly Reports | Oct 31 2017

Buyers of uranium remain firm in their view there will be no market recovery before year end.

– Buyers in no hurry
– Same cannot be said for sellers
– Demand/supply news mixed


By Greg Peel

Sometimes it seems participants in the global uranium and nuclear power industries spend more time attending conferences than they do actually sitting at their desks. Last week it was the turn of the Nuclear Energy Institute’s annual International Uranium Fuel Seminar in Seattle to distract the market.

Attendees came away from the seminar more pessimistic about the possibility of a market recovery, industry consultant TradeTech reports, than they were when they went in. Buyers of uranium do not see any need to chase offers, hence last week saw sellers become more aggressive towards week’s end in order to offload material.

The seminar provided the opportunity for deals to be concluded but interest waned throughout the week. Six transactions totalling 600,000lbs U3O8 equivalent were concluded in the spot market. TradeTech’s weekly spot price indicator has fallen -US30c to US$19.90/lb.

There were no transactions reported in term markets. TradeTech’s term price indicators remain unchanged at US$24.50/lb (mid) and US$30.00/lb (long).

Ups and Downs

News last week on both the supply and demand sides of the market was mixed.

Leading global producer, Canada’s Cameco, summed up the current state of the uranium production industry by announcing a -C$124m loss for the September quarter and lowering full-year production guidance. Noting that it cannot control the timing of a market recovery, Cameco assured, in not so many words, its focus remains one of minimising losses.

It’s all about being as streamlined and efficient as possible, managing production and inventories and protecting contracts while maximising cash flow and retaining an investment grade rating. In other words, hanging in there.

On the demand side, the good news is Canada remains supportive of nuclear energy. The government of Ontario last week released a long term energy plan that recognises the economic benefits of nuclear power and reaffirms commitment to refurbishing all of the province's publicly-owned reactors.

It is also good news that two US states are now showing signs of adopting legislation that would recognise the contribution of nuclear power to base load generation.

And good news that the South Korean government is committed to supporting the completion of the Shin Kori reactor units 5 and 6.

The bad news is that Seoul will cancel plans for six new reactors in line with its long term plan to phase out nuclear power. One might forgive South Korea for being somewhat nervous these days when the word “nuclear” is mentioned.

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