Weekly Reports | Oct 09 2018
The new agreement replacing NAFTA has swung focus onto the progress of the US government’s deliberations on uranium policy.
-First responses to US petition become public
-New NAFTA deal unclear on uranium
-Price trend remains to the upside
By Greg Peel
While the new trade agreement between the US, Canada and Mexico signed last week, replacing NAFTA, lifts tariffs on a number of products, as to whether Canadian uranium exports to the US will attract tariffs or not still depends on the outcome of the ongoing US government investigation into the uranium industry on “national security” grounds.
We recall that two US uranium producers have petitioned the government to force US utilities to purchase 25% of their uranium needs domestically despite foreign imports being cheaper and despite the fact the US nuclear power industry has become uncommercial even if they purchase cheaper foreign uranium at what are still historically low prices.
At the same time, the Trump administration has been advised any future energy security policy must include nuclear power in the mix.
The US government had requested initial public comment on the aforementioned petition with a deadline of September 25, and while not all responses have been made public, some have begun to emerge. It is hardly surprising that opinions vary widely. As to what the Trump administration might ultimately decide is completely unpredictable at this time of trade wars and policy on the run.
This uncertainty is holding back end-use buyers of uranium who are unwilling to lock in contracts for the delivery of uranium according to their requirements until the picture become clearer.
Trend Still Up
Despite this hesitation, the spot uranium price is still up 34% year on year and 55% from the December 2016 low. Industry consultant TradeTech reports 12 transactions concluded in the spot market last week totalling 1.8mlbs U3O8 equivalent. One utility selected its preferred suppliers for a total of 1mlbs.
TradeTech’s weekly spot price indicator rose US35c last week to US$27.65/lb, which was also the month of September closing price. The indicator had fallen -US35c the week before so last week was just a square-up.
There was one transaction reported in term markets last week for an unremarkable quantity.
TradeTech’s term price indicators remain at US$30.00/lb (mid) and US$32.00/lb (long).
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