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Uranium Week: Not Immune

Weekly Reports | Jan 25 2022

Civil unrest in Kazakhstan may lead to supply disruptions for the country’s uranium industry, but across the globe uranium miners are facing such issues anyway.

-Uranium production ongoing in Kazakhstan
-Spot activity dries up
-Supply disruptions hitting the industry

By Greg Peel

Kazakhstan’s state-controlled uranium miner Kazatomprom last week indicated that in spite of civil unrest in the country, production remains on track. Despite a complete internet blackout during recent civil protests, the company managed to keep its clients appraised of conditions at its mining facilities, industry consultant TradeTech reports.

The result was a substantial drop-off in spot uranium market interest last week, compared to the spike in activity the week prior as speculative buyers raced in ahead of a potential cut-off of Kazakh supply, only to find willing sellers.

The prior week saw 2.3mlbs U3O8 equivalent change hands in the spot market in 17 transactions. But despite the speculation, TradeTech’s spot price indicator fell -US10c to US$45.75/lb. Last week 300,000lbs were traded in four transactions.

The surprise feature of last week was the rare appearance of a utility in the spot market. When end-users are buying, sellers are inclined to offer more attractive prices than they would to financial players. Hence TradeTech’s spot price indicator had dropped -US$1.00 by mid-week. A financial entity then jumped in to buy 100,000lbs, but thereafter buying interest disappeared.

TradeTech’s spot price indicator closed down -US1.25 to end the week at US$44.50/lb.

Empty Shelves

While Kazatomprom may have reassured the market with regard its current production, management did warn that “due to interruptions and partial suspension of railway communications in some regions of the country, the company does not exclude the risk of interruptions in the supply chain of some key components necessary to support the company's productions processes”.

However, as anyone not living in a cave would know, civil unrest is not necessary to drive supply chain disruption in 2022, in any industry.

TradeTech points out many producers across the uranium sector are monitoring similar issues as the risk of supply chain disruptions and transportation issues, along with increasing costs associated with needed components and supplies to keep production on schedule, remain a challenge for the entire industry.

TradeTech’s term price indicators remain unchanged at US$43.00/lb (mid) and US$45.00/lb (long).

As at the end of 2021, TradeTech calculates the global average cost of uranium production to be US$45.80/lb.

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