Uranium Week: Just A Flesh Wound

Weekly Reports | Mar 29 2022

After a brief pullback the week before, it was back to buying on the uranium spot market last week.

-Lower house bill to ban Russian uranium hits Congress
-The UK plans for 25% nuclear energy
-Spot uranium price back on track

By Greg Peel

The week before last, Republican senators from Wyoming, Kansas and North Dakota introduced legislation to ban uranium imports from Russia. Last week it was the turn of the lower house, as Republican representatives from Minnesota and Nebraska, along with two Democrat representatives from Texas, introduced a similar bill.

"It's more important now than ever for the United States to achieve mineral dominance to secure our energy supply chain needs," said Congressman Stauber of Minnesota. "By banning uranium imports from Russia, we can stop funding for Putin's brutal war against Ukraine, create jobs for American workers, and secure our national defence."

US mining industry groups have since moved to support such legislation, noting the US imported 34mlbs of uranium from Russia over the 2016-20 period.

"The US has abundant uranium resources, ample infrastructure, and capacity, and world-leading production technologies and practices to protect health, safety, and the environment," said the president of Uranium Producers of America. "But we must recognize the critical nature of uranium and get serious about shoring up the domestic supply chain while we still have the means to do so."

Nuclear energy currently accounts for over half of US non-fossil fuel electricity production.

Meanwhile, UK prime minister Boris Johnson last week flagged a new energy strategy, expected to be outlined this week, including greater investment in nuclear and offshore wind power.

Johnson met with executives from Rolls Royce, Westinghouse and EDF and institutional investors from Canada and Australia ahead of an announcement, stating he would like the UK to get to 25% electricity from nuclear, up from a current 16%, industry consultant TradeTech reports.

The problem with that current 16% is it includes production from legacy reactors scheduled for closure. So significant investment would be required.

Temporary

TradeTech's weekly uranium spot price indicator fell -US$2.75 the week before last to US$55.75/lb in what appeared nothing more than a breather following a 35% gain in a month. Last week the indicator rose US$2.65 to US$58.40/lb, as normal service was resumed.

Volume last week increased to 1.2mlbs U3O8 equivalent in nine transactions, up from 900,000lbs the week before, and TradeTech reports another 500,000lbs changed hands last week off-market.

The Sprott Physical Uranium Trust bought 300,000lbs the week before last and 869,000lbs last week, to bring its total purchases up to almost 53mlbs.

It will be interesting to see how the market fares when the SPUT reaches its intended purchase target, although the trust has increased that target in the past.

TradeTech's term price indicators remain at US$47.00lb (mid) and US$45.25/lb (long).

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