Uranium Week: Paying Up For Certainty

Weekly Reports | Jun 04 2019

Buyers are paying more for uranium that does not come from sources facing possible US restriction but falling demand is still sending prices lower.

-Uranium price discrepancy opens up
-Trend remains down
-IEA rails against premature reactor shutdowns

By Greg Peel

An interesting dynamic opened up in the month of May in uranium markets with regard the uncertainty surrounding the US president’s pending decision on section 232, which may force US utilities to buy at least 25% of their uranium supply from US producers. Presumably that uncertainty is exacerbated every time Donald Trump pulls a new tariff rabbit out of his hat, given tariffs are also a matter of “national security” under section 232.

A wide price discrepancy has opened up based on origin of material. Buyers are now willing to pay higher prices for deliveries specifically not from Russia, Kazakhstan or Uzbekistan, which are potential US trade restriction targets. Buyers who do not specify origin of material are enjoying “considerably” lower prices, industry consultant TradeTech reports.

Transactions involving delivery at Canada’s Cameco, which for many months commanded a premium over other delivery locations, showed little to no price premium over other locations in May but this has been attributed to the general decline in demand.

Uranium spot market transactions totalled just over 2.4mlbs U3O8 equivalent in May – the lowest monthly total since December 2017. A total of 20 transactions was also under the year to date monthly average, as it was in April.

TradeTech’s weekly spot price indicator closed the week, and the month, at US$24.00/lb, down -US30c for the week and -US$1.15 from end-April. The weekly price indicator is now -2% below the average price traded in 2018 of US$24.56/lb.

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