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Uranium Week: Still Waiting

Weekly Reports | Jul 02 2019

The uranium market is left hanging as Trump’s 232 decision is again postponed and not yet rescheduled.

-US section 232 decision postponed indefinitely
-Uranium term prices rise
-Rio Tinto’s Rossing sale approved

By Greg Peel

President Trump was due to be briefed by US Department of Commerce officials on its recommendation regarding the section 232 petition two weeks ago but that meeting was postponed to last week. The meeting was again postponed last week but this time has not been rescheduled.

Presumably Iran, the G20 and a stroll in the DMZ were more important.

It was thus another quiet week for the spot uranium market. Industry consultant TradeTech reports only four transactions concluded totalling 585,000lbs U3O8 equivalent.

It was enough, at least, to push TradeTech’s weekly spot price indicator up US20c to US$24.50/lb, to close out the month.

Total spot volumes for the month of June rose to 3.8mlbs from 2.4mlbs in May. At US$24.50/lb, TradeTech’s monthly spot price indicator rose from US$24.00/lb in May.

Uranium term markets became more active in June despite section 232 uncertainty, with nine mostly mid-term transactions reported. The demand is clearly there, but remains cautious. TradeTech’s mid-term price indicator has risen US$1.15 to US$28.50/lb and the long-term indicator has risen US$1.00 to US$31.00/lb.

Questioning 232

Section 232, which concerns “national security” and is also the law behind Trump’s tariffs, is clearly rattling the Democrat-led House. While the Democrats are largely onside with Trump’s attempts to reel in China, it appears they are not quite so comfortable with Trump’s often spontaneous tariff decisions.

Last week the Representative for Florida introduced the “Reclaiming Congressional Trade Authority Act”, which would limit any new or additional tariffs imposed on national security grounds to a duration of 120 days unless approved by Congress.

Given the Senate remains Republican held, the bill’s passage is far from guaranteed.

Demand & Supply

Meanwhile, lawmakers in the state of Ohio failed to reach an agreement by the June 30 deadline of whether or not the government will provide financial support to FirstEnergy Solutions – the operator of two 30-year old nuclear reactors in the state.

FirstEnergy Solutions is currently working its way through bankruptcy and will be forced to shut down the reactors if no assistance is forthcoming.

Talks will resume this month.

In other news, the Namibian competition regulator has approved the sale of the Rio Tinto’s ((RIO)) 69% stake in the Rossing uranium mine to the China National Uranium Corp. Approval came with various caveats which must be adhered to by CNUC. While the Namibian government owns only 3% of the mine, it has 51% of the voting rights.

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