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Uranium Week: Doldrums Again

Weekly Reports | Sep 03 2019

The uranium market went quiet again last week as participants prepared for the World Nuclear Association’s 2019 Symposium in London this week.

-Brief burst in activity in uranium market proved short-lived
-Industry consultant TradeTech has lowered its term price indicators
-Nuclear generation continues to grow around the globe, most rapidly in Asia

By Greg Peel

The brief burst of activity seen in the uranium spot market the week before, after swing producer Kazakhstan announced intentions to extend its -20% production reduction through 2021, gave way to another quiet week as participants prepared for the World Nuclear Association’s 2019 Symposium in London this week.

The market is also awaiting the recommendations of Trump’s Nuclear Fuel Working Group due on October 10. Notwithstanding the last week of the northern summer vacation period typically sees activity grind to a halt.

Indeed all of August is a quiet period. Industry consultant TradeTech reports only three transactions were completed in the spot market last week, totalling 870,000lbs U3O8 equivalent. No transactions were reported in term markets.

TradeTech’s weekly spot price indicator closed the week unchanged from the week before at US$25.30/lb, up US5c from end-July.

TradeTech’s term price indicators have fallen to US$28.00/lb (mid) from US$28.50/lb, and US$30.00/lb (long) from US$31.00/lb.

Attention at the Symposium will be specifically focused on utilities with “uncovered needs” in 2020, meaning uranium they’ll need to buy. Participants do expect activity to increase post-Symposium as we move into the northern autumn. That said, they’ve been expecting increased utility interest for some time now, in vain.

Attention will also be on the purchasing intentions of major Canadian producer Cameco, which continues to buy in the spot market to satisfy delivery contracts, having curtailed production due to low prices.

A New Generation

While industry participants await signs of new demand in the uranium market, the longer-term view of nuclear power continues to strengthen globally. Nuclear generation is growing most rapidly in Asia, which recorded a 12% increase in generation last year, which is more than one-fifth of global generation, according to the World Nuclear Performance Report 2019 published last week.

In addition, new build projects in the European Union are expected to introduce 4.1 GWe in new nuclear generation capacity in the near term, and have the potential to add more than 6 GWe of capacity to the region over the next 25 years.

In the UK, nuclear power has played an important role in the transition to a low-carbon economy. The nation continues to work toward a new generation of nuclear power plants to replace an existing fleet of reactors, as all but one plant will be out of service by 2031. Recently Britain went a whole week without having to draw upon coal-fired power.

Over in the Dark Ages, Australians are awaiting the results of a new parliamentary inquiry into the use of nuclear power, which are due at year end. Ziggy Switkowski, who led the 2006 review for the Howard government, said the technology had no chance of being introduced unless Australia had a coherent energy policy.

Which it hasn’t had in decades, and there appears no hope on the horizon.

In the US, the fate of the country’s uncompetitive nuclear power industry will no doubt hang on the findings of the aforementioned Working Group.

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