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Uranium Week: One Is The Loneliest Number

Weekly Reports | Aug 20 2019

Volume soared in the spot uranium market to one transaction last week following the prior week’s lack of any transaction.

-Australian government to look at nuclear power solution
-Are small modular reactors a viable option for the future?
-Uranium market activity remains stagnant

By Greg Peel

The Australian government is preparing to hold a parliamentary inquiry into the possibility of pursuing nuclear power. Australia has a long history of dismissing any nuclear power option both from a community fear perspective (dating back to Three Mile Island, on to Chernobyl and more recently Fukushima) and as a result of the power of the coal lobby.

Debate rages nevertheless, given Australia’s legacy coal-fired power plants are due for decommissioning and the issue of future baseload power is becoming critical. The obvious proposition from the coal lobby and its supporters in parliament is to build new coal-fired generators. The community on the other hand, at least those not involved in the coal mining industry, is supporting renewable energy solutions, and home/business solar take-up is increasing a-pace.

The coal lobby has managed to prevent state governments over time to allow even uranium mining in some states, whereas any appeal to wind down thermal coal exports on a climate change basis is met with contempt. It is before this backdrop one Queensland state parliamentarian last week suggested “Nuclear energy has evolved since it was last seriously considered in Australia. This inquiry will provide the opportunity to establish whether nuclear energy would be feasible and suitable for Australia in the future, taking into account both expert opinions and community views”.

Renewed interest in nuclear power is being spurred by federal Minister for Energy and Emissions Reductions Angus Taylor’s interest in small modular reactors (SMRs). Proponents of SMRs believe there is an opportunity for Australia to become specialized in SMRs, which require less capital to build and can be deployed in clusters to replace larger coal stations.

I’d say good luck with that one.

In the US the uranium industry remains in a state of flux. Participants were expecting last week to be able to learn why the Department of Commerce had supported a request under section 232 to force US utilities to buy US uranium or suggestions of a tariff being placed on uranium imports – recommendations the president has since dismissed in favour of an industry-wide review.

But the DoC missed its own self-imposed deadline to publish its recommendations, even in redacted form.

Which is of no help to a uranium market beset by uncertainty as the president’s Working Group prepares its own recommendations on the nuclear fuel cycle.

Sellers became a little more anxious last week, but volumes did not exactly surge. The week before saw not one transaction in the uranium spot market. Industry consultant TradeTech reports last week saw just the one, for 100,000/lbs U3O8 equivalent.

TradeTech’s weekly spot price indicator has fallen -US35c to US$24.90/lb.

TradeTech’s term price indicators remain at US$28.50/lb (mid) and US$31.00/lb ( long).

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