Weekly Reports | Jun 12 2019
The uranium spot price has posted its first weekly increase in almost two months.
-Uranium market remains fractured
-Finland gets ambitious
By Greg Peel
After a long, steady decline in the spot uranium price in 2019 on section 232 uncertainty, buyers finally emerged from the woodwork last week in the form of both utilities and investors. While US utilities continue to remain mostly on the sidelines, non-US utility interest has prompted sellers to cast their nets wider.
US utilities who are interested in purchases continue to target material acceptable for delivery in the US as opposed to that sourced from the likes of Russia, Kazakhstan or Uzbekistan which remains subject to potential 232 restrictions.
Industry consultant TradeTech reported 650,000/lbs U3O8 equivalent changing hands in the spot market last week. As the buyers stepped in, the sellers retreated as the week progressed, and so the buyers backed off again. Regardless,TradeTech's weekly spot price indicator rose US60c to US$24.60/lb – the first weekly increase in almost two months.
Two transactions were also concluded in term markets last week. TradeTech's term price indicators remain at US$27.35/lb (mid) and US$30.00/lb (long).
Outside of the open markets, London-based investment firm Yellow Cake last week purchased a further 1.175mlbs U3O8 from Kazakhstan's Kazatomprom under the option agreement between the two.
Say no to carbon
In Japan, an energy white paper was last week accepted by Cabinet which notes that the country faces an "urgent task" of reducing carbon emissions from utilities heavily reliant on the burning of fossil fuels. Japan was forced to return to elevated coal and gas-fired electricity production when all nuclear plants were shut down in 2011, and the pace of restarts remains glacial.
The government is targeting an increase of renewable production to 22-24% of its energy mix from a current 16% by focusing on reducing its cost, and a similar target has been set for nuclear power in the mix. In 2017, nuclear contributed only 3%.
The plan is to reduce carbon emissions by -26% from 2013 levels by 2030. To date only a -7% reduction has been achieved, hampered by a current 74% level of coal/gas-fired production to make up for lost nuclear.
To reach its energy mix target, up to 30 reactors would need to be in operation. Of the 35 reactors in the country which are operable, only nine are currently operating, six have received initial restart approval, twelve are under review and eight have yet to file for restart.
If Japan's carbon reduction target looks at all ambitious, Japan has nothing on Finland. The newly appointed government in Finland has pledged to reduce carbon emissions to zero by 2035.
Moreover, Finland is set to take over the rotating EU presidency in July, just as an ambitious pan-European climate deal remains in negotiation.
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