Weekly Reports | Dec 20 2022
Ongoing Russian attacks on Ukraine's energy infrastructure are steeling the resolve of utilities to secure uranium and of nations to invest in nuclear power.
-US DoE issues purchase contracts
-Uranium term market activity continues to rise
-India and Korea step up nuclear investment
By Greg Peel
While the uranium spot market remains beholden to financial market volatility, and activity slows ahead of the holidays, utilities were very much involved in the spot market last week despite shying away all year. The US Department of Energy has finally awarded its purchase orders.
Months ago the Biden Administration decided it would be a good idea, in lieu of the war, to build a strategic reserve of uranium akin to the Strategic Petroleum Reserve. It also resolved to Buy American, and the DoE set about putting out requests for proposals for supply.
The Uranium Reserve Program will kick off with a purchase of 1mlbs U3O8, to be supplied by US producers in amounts of 100,000 to 500,000lbs, to spread the love. Contracts were awarded last week.
Otherwise, the spot market saw two other transactions in the week, and industry consultant TradeTech's weekly spot price indicator fell -US40c to US$47.60/lb.
More Urgent
Putin's unending attempt to freeze Ukrainians into submission has further driven home the importance, and the urgency, for US and European utilities to secure supply for the next five to ten years from anywhere other than Russia.
As formal demand continues to emerge in the term uranium market, a number of utilities are in off-market discussions with potential suppliers for significant volumes in the mid- and longer-term delivery periods, TradeTech reports.
In many cases, buyers have passed the discussion phase and are now in formal negotiation with suppliers for material, in some cases for deliveries extending as far out as 2035.
Strong term demand from utilities, combined with expectations by sellers that prices will rise in the future, has caused sellers to gradually increase their offer prices and utilities are seeing a narrower range of pricing than what has been offered in recent months.
TradeTech's term price indicators remain at US$51.00/lb (mid) and US$53.00/lb (long).
More Power
India has announced plans to add nearly 15,000MW equivalent of new nuclear power capacity over the next ten years.
In addition, the South Korean government said last week it will invest US$308m annually to develop small modular reactors as part of a plan to double overall annual spending on nuclear energy to US$1.5bn.
This is the last Uranium Week for 2022. The Uranium Week will return in January.
Merry Christmas.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 19/12/2022 | 0.0390 |  – 7.14% |
$0.12 | $0.04 | |||
| BKY | 19/12/2022 | 0.2850 | – 5.00% |
$0.64 | $0.20 | |||
| BMN | 19/12/2022 | 1.6350 |  1.55% |
$2.49 | $0.15 | |||
| BOE | 19/12/2022 | 2.1700 | 1.88% |
$3.10 | $1.61 | $3.200 | 47.5% |
|
| DYL | 19/12/2022 | 0.7650 | 7.75% |
$1.25 | $0.55 | |||
| ERA | 19/12/2022 | 0.2200 | – 2.22% |
$0.42 | $0.16 | |||
| LOT | 19/12/2022 | 0.1850 | – 7.50% |
$0.46 | $0.18 | |||
| NXG | 19/12/2022 | 6.0100 | – 0.99% |
$8.99 | $0.00 | |||
| PDN | 19/12/2022 | 0.7350 | 5.76% |
$0.97 | $0.53 | -127.2 | $1.000 | 36.1% |
| PEN | 19/12/2022 | 0.1350 | 12.50% |
$0.28 | $0.12 | |||
| SLX | 19/12/2022 | 2.9900 | 6.79% |
$4.14 | $0.99 |
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