Weekly Reports | Nov 10 2020
The big players in global uranium production are back in business.
-Kazatomprom restarts production
-Cameco production already underway
-The weekly spot price increases by 1% in two weeks
By Mark Woodruff
The world’s largest uranium producer, Kazatomprom, reported this week that activities at all of its mining operations in Kazakhstan have resumed and progressed according to the company’s plans, following a four-month covid-related shutdown.
Well field development drilling and the associated work to bring on new well fields began to ramp up in August, notes industry consultant TradeTech. This follows the recent reduction of non-essential staff at the outset of the pandemic.
The company’s production guidance for FY21 remains unchanged.
Meanwhile, the world’s second largest uranium producer, Canada's Cameco, released third-quarter results that were impacted by operational decisions taken earlier this year in response to the pandemic.
The quarter was also impacted by ongoing purchase activity and additional care and maintenance costs of US$13.7 million, resulting from the proactive decision to suspend production at the company's flagship Cigar Lake Mine, reports TradeTech.
Cameco noted that it safely restarted Cigar Lake in September, and as planned, it took about two weeks to achieve initial production.
The company posted a net loss of -US$46.3m and expects cash balances and operating cash flows to meet capital requirements during 2020, and does not anticipate drawing on its credit facility.
Uranium Pricing
TradeTech’s Weekly Uranium Spot Price Indicator is at US$30.00/lb, up US$0.10/lb from last week.
Total spot uranium transactional volume for the first week of November totalled around 800,000lbs U3O8 equivalent.
Although the Weekly Spot Price Indicator has moved up by 1% in the last two weeks, volatility in the indicator remains on a downward trajectory. Movement in the weekly spot price has tended to be relatively minor since May and has generally trended downward averaging a $US0.14/lb (-0.4%) week-on-week decline over the last six months.
Nonetheless, the Weekly Spot Price Indicator has increased nearly 22% in the last year and has averaged a 0.5% weekly increase in 2020 (largely attributable to increases in the price related to several covid-driven supply reductions).
The average weekly uranium spot price for 2020 is $US29.70/lb, $US3.86/lb above the 2019 average.
TradeTech's term price indicators are unchanged at US$34.00/lb (mid) and US$37.00/lb (long).
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