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Uranium Week: Interest Up, But Price Still Down

Weekly Reports | Jan 21 2020

Utilities are increasingly taking an interest in uranium market developments, but so far the spot price continues to slide further south.

-General interest from utilities is rising, with the number of active discussions on the increase
-Uranium demand is anticipated to lift later this quarter
-Global transitioning towards carbon neutral does not always involve nuclear power generation

By Rudi Filapek-Vandyck

Spot uranium continues to slide downwards as the pricing pressure that started to exert itself during the final weeks of calendar 2019 simply won't go away.

Industry consultant TradeTech does report, however, buying interest is returning with a variety of parties showing renewed interest, though this has, to date, not prevented the price of uranium weakening further.

On TradeTech's assessment, spot U3O8 weakened yet another -US10c last week to US24.50/lb. This is despite four spot transactions totaling over 400,000 pounds U3O8 being concluded during the week.


Utilities Increasingly Showing Interest

One source of industry optimism stems from the fact a number of utilities have started up preliminary discussions with potential suppliers. TradeTech reports some of these discussions have already led to concrete purchases, with some market participants expecting demand to return throughout this quarter.

According to the industry consultant, utilities that have thus far not shown too much concrete activity remain keen observers of market developments, signalling they are prepared to enter the market in 2020 depending on further developments and on how market and political uncertainties play out.

TradeTech reports several utilities are pursuing offmarket discussions with potential suppliers regarding the purchase of material for mid-term deliveries as well as longer-term commitments.

TradeTech's mid-term and long-term price indicators have remained unchanged since late December at US$29/lb and US$33/lb respectively.

Going Green Not Automatically Benefiting Uranium

Meanwhile, global aspirations and initiatives to become more energy efficient and to replace heavy polluting sources of energy with greener, more sustainable practices are multiplying and increasingly attracting attention.

In what is undoubtedly seen as a major disappointment by the uranium industry globally, not all of such initiatives involve the inclusion of uranium for the transition towards economies and economic sectors becoming carbon neutral by 2050.

The 13th World Future Energy Summit in Abu Dhabi saw Dr. Sultan Al Jaber, UAE Minister of State, announcing ambitious greenhouse gas reduction plans which also involves nuclear power generation.

The European Commission, on the other hand, has launched a EUR1bn program to make the European Union carbon neutral by 2050. Europe's Green Deal involves no uranium, with the Commission excluding any of the funds being used for nuclear power plants.

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