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Uranium Week: Even More Complicated

Weekly Reports | Mar 12 2019

Congress has now weighed into the 232 debate, potentially further delaying a decision from the White House.

-Congress moves to curb presidential power
-Uncertainty constraining uranium market volumes

By Greg Peel

Last week the chairman of the US Senate Finance Committee, Republican Charles Grassley, directed his staff to work with senators on both sides of the aisle to produce a bill aimed at restricting the president’s national security tariff powers.

For a brief recap of the Section 232 issue and its current constraint on uranium markets, see last week’s report.

Earlier this year, another Republican senator, Rob Portman reintroduced the Trade Security Act of 2018, which would allow Congress to negate trade restrictions imposed by the US president under section 232 if it passes a joint resolution of disapproval.

Note that US tariffs imposed to date on China and others have been implemented under section 232, which deals with matters of “national security”.

Back in January, another Republican senator, Pat Toomey, introduced the Bicameral Congressional Trade Authority Act, which would give Congress 60 days to approve section 232 actions and, notably, allows Congress to review restrictions imposed within the last four years.

Two uranium producers have petitioned the US government on the basis of national security, ie section 232.

232 uncertainty has been hanging over uranium markets since January 2018 and 2019 to date was dominated by an onerous Department of Commerce questionnaire, which industry participants submitted the week before last. Presumably it will now take the DoC some time to wade through responses before formulating a recommendation for the president, who then has months to make a decision.

Weighing into the debate is the Washington-based Nuclear Energy Institute. The NEI last week wrote a letter to the DoC suggesting policy recommendations in response to the ongoing section 232 investigation into uranium imports. NEI's proposal, which brings together recommendations by separate supplier and utility groups, outlines solutions with the stated aim of helping to maintain a domestic mining infrastructure.

Let’s just say no one in the industry will be expecting resolution any time soon. The outcome may have a significant impact on the price US utilities will have to pay for uranium supply.


Uncertainty has led led to lower volumes in uranium markets, as utilities curb their longer term supply demand pending an outcome. Last week saw six transactions included in the spot market totalling 800,000lbs U3O8 equivalent, industry consultant TradeTech reports.

TradeTech’s weekly spot price indicator has fallen -US5c to US$28.10/lb.

One small transaction was concluded in term markets. TradeTech’s term price indicators remain at US$30.00/lb (mid) and US$32.00/lb (long).

The question must be asked as to just how much 232 risk is priced into the market currently. Were the US government to act in accordance with the petition then US utilities would be forced to purchase 25% of their uranium requirements from domestic producers, who have complained that they cannot compete with cheaper imports from the likes of Russia and Canada.

In other words, utilities would have to pay more for their uranium than they do now, and at current prices they are mostly uncompetitive in the electricity market anyway. That would suggest it might be a good idea to buy uranium now at cheaper prices were 232 to be invoked in this case. Unless the government were to reject the petition, and prices fall in response.

Uncertainty reigns.

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