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Uranium Week: Net Zero Puts Nuclear In Focus

Weekly Reports | Oct 12 2021


As the weekly spot uranium price falls for the third consecutive week, the importance of nuclear power was reinforced by governments in Japan and the UK.

-UK brings forward decarbonisation target, while Japan recommits
-ASX-listed Alligator Energy reports increasing long-term supply interest from utilities
-Uranium spot price falls over -9% for the week

By Mark Woodruff

A new plan by the UK government brings forward the commitment to a fully decarbonised power system by 15 years to 2035. A target of 2050 was originally set out in the December 2020 Energy White Paper.

The White Paper identified nuclear power would help achieve a four-fold increase in clean electricity generation, needed to achieve the country’s net-zero target by 2050.

The new plan focuses upon building a secure, home-grown energy sector (including nuclear energy) that reduces reliance on fossil fuels and exposure to volatile global wholesale energy prices.

According to Tom Greatrex, Chief Executive of the Nuclear Industry Association, “the target requires urgent investment in a new generation of nuclear stations for clean and reliable power.” He further suggests “the government needs to legislate for a new financing model and give its clear backing to large and small nuclear projects."

Country news

Concerns have been allayed in Japan over support for the previous administration's energy policy and the country's nuclear power program, following comments by new Industry Minister Koichi Hagiuda last week.

Mr Haigiuda was quoted stating nuclear power is "indispensable" to decarbonising Japan and there are plans to expand renewable energy and restart nuclear power plants.

The country has set a 2030 target for a -46% decrease in greenhouse gas emissions from 2013 levels and aims to be carbon neutral by 2050.

Japan's nuclear target was left unchanged at 20-22% of the energy mix, in a revised energy plan announced in July this year.

Company news

After a successful $11m placement, the ceo of ASX-listed Alligator Energy ((AGE)) concedes shareholders may be surprised that additional funds were required. 

Following the recent rise in the U3O8 spot price, the company has decided to accelerate its plans after being approached by utility buyers regarding future long-term uranium contracts.

The funds will be deployed toward developing the Samphire Uranium project in South Australia and accelerating the Nabarlek Uranium Project, located in the Alligator Rivers Uranium Province in the Northern Territory.

Uranium pricing

TradeTech's Weekly Spot Price Indicator fell by -US$3.85/lb last week to US$37.4/lb, as sellers lowered offer prices over the course of the week.

This is a decline of over -9% for the week, nearly -29% over the last three weeks, and a fall of -US$13.10/lb from the mid-September year-high of US$50.50/lb.

The Indicator is up 23% in 2021, and is over 60% above the 2021 low point of US$27.40/lb. The average Weekly U3O8 spot price in 2021 is US$32.39/lb; US$2.68/lb above the 2020 average.

Volume remained steady last week, with 1.8mlbs U3O8 in transactions reported.

TradeTech's term price indicators are US$43.75/lb (mid) and US$45/lb (long).

The sharp decrease in the spot uranium price during the first week of October has caused term sellers to reassess their selling strategies, and utilities are seeing more competitive offers than those recorded in September, notes TradeTech.

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