Weekly Reports | May 05 2020
Curtailed supply has led to the spot uranium price rising 24% in the month of April and 41% in six weeks.
-Biggest price rise for uranium in thirty years
-Spot volumes also surge
-Term markets remained subdued
By Greg Peel
In the month of April, the spot uranium price rose almost 24% to mark the largest monthly increase in almost thirty years. In six weeks, the spot price has risen 41%, being the fastest rise since 2007. Back in 2007, uranium’s surge was all about “green” power. That bubble burst even before the GFC.
Then in 2011, Fukushima sent prices tumbling. As utilities were sitting on more than sufficient stockpiles of material for an extended time period, including the Japanese, any move up in prices from that time proved short-lived.
Low prices then forced rolling supply curtailments across the globe. While those curtailments did result in slightly higher prices, it wasn’t until the virus hit that prices really began to take off, as the last of major operations shut down, this time for safety reasons.
The spot price rose 41% in the six weeks to end-April and 35% in 2020 year to date.
“While the deterioration of existing and planned production has yet to result in notable term contracting, the years-long decline in supply development has driven concerns about the availability of future supply,” notes industry consultant TradeTech. “This evolving undersupply condition has been amplified by further reductions to existing production, due to precautionary measures put in place at many uranium mines to slow the spread of the novel coronavirus”.
Larger uranium producers also have stockpiles they can draw upon, but this hasn’t stopped the likes of major Canadian producer Cameco acting as a significant buyer of spot uranium to satisfy delivery contracts.
TradeTech reports 22 spot transactions totalling 2.6mlbs U3O8 equivalent were reported in the week ending May 1. TradeTech’s weekly spot price indicator has risen by US70c to US$33.90/lb.
The month of April saw 76 deals completed totalling 9.4mlbs U3O8 equivalent, up from 6.8mlbs in March. From end-March, the spot price rose US$6.45 to US$33.75/lb.