Weekly Reports | Apr 02 2019
The spot uranium price has been in a downward trajectory over the past nine weeks, continuing its slide last week.
-Global energy demand accelerates
-Spot uranium price decline accelerates
-Brexit also impacting on UK utilities' cautiousness
By Greg Peel
Global energy demand grew by 2.3% in 2018, the International Energy Agency reports, to mark the fastest growth this decade. Aside from simple economic growth driving demand, greater demand for heating and cooling in different regions, implying colder winters and hotter summers, had an impact.
Natural gas is the fuel source of choice, representing 45% of the rise in energy consumption. Gas demand growth was especially strong in China and the US.
Nuclear energy grew by a comparative 3.3%, but did return to pre-Fukushima demand levels thanks to new reactors in China and restarts in Japan. Globally, nuclear met 7% of the increase in electricity demand.
Buyers' Strike
The spot uranium market has been in a downward trend for the past nine weeks and the slide has been accelerating in recent weeks. Last week was another in which buyers were thin on the ground, with utilities basically out of the market ahead of the section 232 report to be delivered to the White House on April 14. Brexit uncertainty is also cited as a reason utilities are currently cautious.
A uranium producer entered the market on Friday seeking proposals for the delivery of 1mlbs U3O8 equivalent in either April or May, but failed to move the dial. The spot price fell steadily over the week and after 1.1mlbs were exchanged, industry consultant TradeTech's weekly spot price indicator fell -US$1.10 from the prior week to US$24.90/lb, where it closed out the month.
The spot price finished March down -US$3.10 from end-February and is now down -13.4% year to date, but still up 18% year on year. A total of 5.9mlbs U3O8 equivalent changed hands in the month in 39 transactions.
Weakness in the spot market has now impacted on the mid-term market. TradeTech's mid-term price indicator has fallen -US$2.00 to US$28.00/lb. The consultant's long term indicator remains unchanged at US$32.00/lb.
Only two transactions were concluded in term markets in March, totalling 3.1mlbs for delivery 2020-25.
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