Uranium Week: Wild Month

Weekly Reports | Apr 05 2022

The spot uranium market traded in a wide range in March due to off-again, on-again speculation regarding a potential US ban on Russian uranium exports.

-Uranium not originally included in US sanctions
-Two bills now in Congress to do just that
-Spot and term prices rise, as does the estimated cost of production

By Greg Peel

It was a tumultuous month of March in uranium markets. When sanctions were first imposed on Russian exports it was assumed uranium would be included, sending the spot price surging up to US$60.00/lb. When uranium wasn’t included, the price fell back to US$48.50/lb.

But bills proposing the banning of Russian uranium exports to the US have since been put forward in both the Senate and the House, sending the spot price back up again.

U3O8 closed the month at US$58.20/lb on industry consultant TradeTech’s spot price indicator, which was last Thursday, up from US$49.00/lb at end-February.

On Friday, TradeTech’s weekly spot price indicator had risen to US$59.00/lb, to marking a US60c increase week on week.

Last week saw 800,000lbs U3O8 equivalent change hands in six transactions. The month of March saw total volume of 8.1mlbs.

While utilities were engaged to some extent in the spot market in March, it was speculative interest which drove prices higher, particularly that of the Sprott Physical Uranium Trust.

During a US Senate Energy Committee hearing last week, Uranium Producers of America president Scott Melbye stated the UPA "strongly supports legislation to impose . . . a ban on Russian uranium imports," similar to the Biden Administration's ban on the import of Russian oil, natural gas, and coal which received bipartisan legislative efforts in the Senate and House.

Term Markets

While utilities may have largely stayed out of a volatile spot market, they were actively engaged in term markets in March as they pushed forward with commitments to non-Russian supply sources to hedge against not just a possible ban on uranium exports, but also the difficulty financial and other sanctions on Russia imply.

Eleven transactions totalling 11mlbs U3O8 equivalent were completed in the month.

Utilities picked up material over a wide delivery period, TradeTech notes, with several committing to purchases extending into 2032. Others opted to acquire material in the near and mid-term delivery windows.

Utilities dominated as the primary buyers in the term market in March, but other entities also stepped into the term market to secure material for delivery outside of the spot delivery window and extending in some cases for several years.

TradeTech’s term market price indicators have risen to US$58.00/lb (mid), up from US$47.00/lb in February, and US$50.00/lb (long) up from US$45.25/lb.

TradeTech has also increased its estimated average cost of production to US$52.00/lb, from US$46.60/lb.

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