Weekly Reports | Oct 23 2018
The uranium spot priced ticked up again last week as Section 232 uncertainty lingers.
-232 submissions roll in
-Canada bites back
-Kazatomprom IPO to proceed
By Greg Peel
The US Department of Commerce Section 232 investigation into US uranium imports from state-sponsored producers remains ongoing, with more than 900 comments now having been received for review. The investigation, prompted by a petition from two US uranium producers, centres on cheap imports pricing domestic production out of the market. The producers wish to impose a 25% “buy American” obligation on US nuclear utilities.
Comments submitted by Canada and a US utilities coalition point out that it is reduction in demand – not imports – which has led to low uranium prices. Canada added that while a solution is needed to rein in state-sponsored activity in the uranium market (with Russia and Kazakhstan having previously been singled out), the US should refrain from imposing an import adjustment measure on key allies.
It’s NAFTA all over again.
The petition aside, the Trump administration has also this month imposed limits on the sharing of civilian nuclear power technology with China. US officials believe the limits are warranted in response to theft of nuclear technology and intellectual property for military and other purposes. The policy likely ends Westinghouse Electric’s hopes of expanding its presence in China beyond the four new-age AP1000 reactors already scheduled.
All of the above is creating uncertainty in the global uranium market, leading utilities to remain cautious about committing to purchases. Yet still the uranium spot price continues to rise, driven predominantly by investor interest and producers buying in material to satisfy contracts rather than producing it themselves at a loss.
Industry consultant TradeTech reported seven transactions concluded in the spot market last week totalling 800,000lbs U3O8 equivalent. TradeTech’s weekly spot price has risen US15c to US$27.70/lb, while term prices remain at US$30.00/lb (mid) and US$32.00/lb (long).