Weekly Reports | Mar 13 2018
While the world reels amidst global trade uncertainty, India has outlaid plans to become nuclear self-sufficient.
– Weekly spot price movements remain lacklustre
– US-Europe price gap narrows
– India unveils ambitious production plans
By Greg Peel
Industry consultant TradeTech’s weekly uranium spot price indicator fell -US25c last week to US$22.00/lb as financial urgency forced sellers in Europe into action. Recent weeks have seen the price gap for uranium for European delivery widen over the equivalent in the US given a comparative tightness of European supply.
That gap closed slightly last week as some sellers gave up on holding out for better prices. TradeTech reports seven spot transactions were concluded totalling 900,000lbs U3O8 equivalent.
The spot uranium price has shown minimal movement on a week to week basis this year on a combination of uncertainty of the impact of production cuts announced by major producers late last year and uncertainty over the pending section 232 petition investigation in the US with regard US uranium imports. It is 232 that gave us Trump’s steel and aluminium tariffs.
Yet day to day spot price movements have been rather volatile of late, TradeTech notes largely because traders are dominating the buy-side, with utilities content to sit and wait for lower prices, and also the sell-side, along with producers who have little choice but to offload their product. It has not been unusual for prices to dip sharply earlier in the week, sparking up the buyers, before sellers back off again to provide for a more minimal week on week change.
There are currently five nuclear reactors under construction in India – four Indian-designed and one Russian-designed. There are a further 19 reactors planned for construction over the next several years, including 10 Indian-designed reactors scheduled to be operational by 2031.
With all but five of the 40-odd reactors operating in Japan pre-Fukushima remaining idled, nuclear power reduction policies in place in Europe and South Korea, and uncertainty with regard the ongoing viability of US nuclear power, India appears set to join China as a primary driver of future uranium demand growth. But while China will have to import uranium, India boasts its own resources.
Hence India has unveiled plans to increase the country’s uranium production “tenfold” over the next 15 years. The plan includes the maintenance of existing production, expansion of production at some sites and the construction of new mines and processing facilities across different parts of the country.
The aim is to become nuclear self-sufficient. If all goes according to plan, presumably India will become a uranium closed shop that will have no effect on the global demand/supply balance.
India signed a major uranium import deal with Australia in 2014. The first shipment was not actually made until mid-last year, at which point the Australian government declared the deal with India could double the size of the Australian uranium industry.
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