Weekly Reports | Nov 22 2022
As uncertainty remains over the future of Russian uranium exports, another transport route, which bypasses Russia, is offering an alternative.
-Spot uranium market remains quiet
-Utilities turning to beyond-spot contracts
-Crossing the Caspian
By Greg Peel
As the COP27 conference came to a close in Egypt on Friday, it is clear nuclear energy is playing a crucial role during the current geopolitical situation and must be included when reshaping an energy paradigm and policies going forward.
This was the message presented by the international nuclear energy industry, industry consultant TradeTech reports, which issued a joint statement in support of nuclear's role in the global energy sector today and in the future.
The document submitted by the group calls for decision makers to acknowledge and support the need for increased nuclear energy generation around the world to improve energy security and reduce dependence on fossil fuels, to ensure a fair and affordable transition to a zero-carbon economy, and to safeguard jobs and economic growth.
Getting the message last week was the new UK (conservative) government, which formally announced support for the first state-funded nuclear power plant in over 30 years.
Brazil was also listening, where the new government has restarted a project to complete a new plant, which will also be state-funded and operated.
Caravanserai
Nine months into the war, which has brought a long list of sanctions against Russia, uncertainty still remains as to whether exports of Russian enriched uranium to the West will be banned.
Western utilities are continuing to receive Russian material on longer term supply contracts entered into before the invasion, but they are moving swiftly to diversify their supply as soon as possible.
Some countries in Europe, including France, are particularly reliant on nuclear energy and thus imports of Russian uranium, until new sources can be secured. One such source would be Kazakhstan – the world’s largest producer of uranium – but all Kazakh exports are delivered through the Russian port of St Petersburg. Canada has previously banned shipments out of St Petersburg.
There is an alternative.
Kazatomprom – the Kazakh mostly state-owned producer – is looking to establish a Trans-Caspian International Transport Route. Such a route has been discussed previously by related countries, but now is very much on the drawing board.
The Trans-Caspian International Transport Route, which travels from China to Kazakhstan, across the Caspian Sea to Azerbaijan and on to Georgia and Turkey, would bypass Russia completely. Turkey would be the hub to distribute uranium to Europe.
While Kazatomprom is pushing the plan, the TITR would involve transport and shipping companies from several nations, combining road, rail and sea.
Interestingly, the route is familiar to China – already considered part of the Belt & Road. It is also familiar to all countries involved, as other than the crossing the Caspian part, it’s basically the old Silk Road, which linked China to Venice.
Term Demand
Meanwhile, it was another quiet week on the spot uranium market last week. TradeTech reports only three transactions completed, and the consultant’s weekly spot price indicator has ticked up another US25c to US$50.25/lb.
All the action is in term markets, where a number of utilities, US and non-US, are expected to issue Requests for Proposals or seek off-market offers for term uranium in the coming weeks.
For several months, TradeTech reports, utilities have been building their supply portfolios out into the later delivery years as a means of circumventing nearer term uncertainty, with many entering into agreements for deliveries beyond 2030. In recent weeks, however, utilities have shifted their focus to deliveries just beyond the spot window and extending into the mid-term period.
In other words, utilities are staying right out of a volatile spot market now dominated by financial speculators.
TradeTech’s term price indicators remain at US$53.00/lb for both mid and long term.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 18/11/2022 | 0.0460 |  -11.54% |
$0.12 | $0.04 | |||
| BKY | 18/11/2022 | 0.2800 | – 3.45% |
$0.64 | $0.14 | |||
| BMN | 18/11/2022 | 1.9100 | -12.79% |
$2.49 | $0.15 | |||
| BOE | 18/11/2022 | 2.3700 | – 8.85% |
$3.10 | $0.31 | $3.300 |  39.2% |
|
| DYL | 18/11/2022 | 0.7300 | -12.05% |
$1.25 | $0.55 | |||
| ERA | 18/11/2022 | 0.2100 | 2.50% |
$0.42 | $0.16 | |||
| LOT | 18/11/2022 | 0.2300 | – 6.25% |
$0.46 | $0.19 | |||
| NXG | 18/11/2022 | 6.5200 | – 1.95% |
$8.99 | $0.00 | |||
| PDN | 18/11/2022 | 0.7700 | -12.50% |
$1.01 | $0.53 | -134.9 | $1.100 | 42.9% |
| PEN | 18/11/2022 | 0.1700 | – 8.33% |
$0.28 | $0.14 | |||
| SLX | 18/11/2022 | 3.0900 | 3.00% |
$4.14 | $0.99 |
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