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Uranium Week: Stalemate

Weekly Reports | Feb 27 2018

The buyers are lined up in the uranium spot market but are not prepared to meet prices on offer.

-Utility demand driving off sellers
-Buyers not paying up
-US uncertainty continues

By Greg Peel

Last week there were two non-US utilities awaiting offers in the uranium market, industry consultant TradeTech reports. Of note is one utility seeking a total of 1.02mlbs U3O8 to be delivered in three tranches across April, September and December, with offers due by March 19.

This significant near-term demand has spot market sellers trying to milk their offers, resulting in price-sensitive buyers showing no interest.

This stalemate, and market stasis driven by uncertainty regarding US uranium export policy under review (see previous Uranium Weeks), ensured spot market activity was again relatively quiet last week. TradeTech reports five transactions totalling 500,000lbs U3O8 equivalent.

TradeTech’s weekly spot price indicator has leapt US5c to US$21.95/lb.

Three transactions were reported in term markets – two for moderate mid-term volumes and one for 1mlbs to be delivered over four years. TradeTech’s term price indicators remain unchanged at US$26.00/lb (mid) and $30.00/lb (long).

Not Investing Enough

The head of the International Energy Agency noted last week that while China will triple its nuclear power capacity over the next twenty years, Europe and US are not investing enough.

The issue in the US continues to be one of nuclear power being rendered uneconomic at wholesale power prices driven by cheap natural gas generation.

To that end, the government of New Jersey last week advanced a bill that would provide a US$300m taxpayer rescue package for the state’s Hope Creek and Salem nuclear plants that are no longer financially viable without government assistance.

On the other side of coin, and the world, Poland’s state-owned power producer is looking for partners to build the country’s first nuclear reactor, in order to move away from coal-fired generation.

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