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Uranium Week: Rush Of Interest

Weekly Reports | Feb 06 2018

The spot uranium price continues to fall but the end of the month saw a rush of utility buying.

Utilities spark up late in January
-Term prices slide once more
-Ups and downs for US nuclear power

By Greg Peel

The past two Uranium Week reports have highlighted a petition put to the US Department of Energy that had all but shut down the uranium market as participants wait to see what might happen next. Industry consultant TradeTech notes that for most of January, the market was unusually quiet.

Only 13 spot market transactions were recorded up to January 26. A lack of buyers led to TradeTech’s spot price indicator falling -8.4% from December 31. But that price fall provided enough incentive, it appears, to prompt utilities into buying ahead of month-end.

Seven utilities entered the spot or mid-term uranium markets in the last three trading days of January, seeking quantities ranging from minimal to several hundred thousand pounds of U3O8 equivalent for multi-year delivery.

Twelve spot transactions were recorded in those three days, totalling 1.5mlbs. More than a million pounds were delivered to ConverDyn in the US. A price disparity has again arisen between US and European delivery points given a greater availability of material in the US and more aggressive sellers.

TradeTech’s spot price indicator closed the month down -US$2.00 from end-December at US$21.75/lb. The price hike seen late last year, following significant production cut announcements from the likes of Cameco and Kazatomprom, was close to being wiped out.  But last Friday that indicator had risen back to US$22.25/lb, providing for a week-on-week price drop of -US75c.

Term Pressure

As the uranium spot price tumbled all through 2017, so too did TradeTech’s mid and long term price indicators. There was a glimmer of hope, however, when late last year the consultant saw fit to increase term price indicators alongside a spot price bounce.

Alas, the increase proved short-lived. TradeTech’s indicators were revised down again at end-January, down -US$2.00 for mid-term delivery to US$26.00/lb, and down -US$1.00 to US$30.00/lb for long term delivery.

Reaction

History was made in the US last week when it was announced the country’s oldest remaining operating nuclear reactor, at Oyster Creek in New Jersey, would shut down in October this year. While the reactor was commissioned way back in 1969, the announcement still represents an early closure.

More history was made in the US last week, in completely the opposite sense. Operators of the Turkey Creek plant in Florida have applied for a second licence renewal for two of the plant’s units. While many reactors have had their lives extended beyond original timelines through one licence renewal, no reactor has ever had its licence renewed twice.

If approved, Turkey Creek units 3 and 4 will be allowed to continue operation until 2052-53.

What will the world’s energy supply and demand dynamics look like in thirty-five years’ time?

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