Uranium Week: Market On Edge

Weekly Reports | Jan 24 2023

Media reports suggest Russias state-owned uranium company has offered Russias military whatever it needs, prompting renewed calls for sanctions.

-Sanction concerns again hang over global uranium supply
-U3O8 spot market remains quiet
-Support for nuclear energy at Davos
-Outlook for 2023

By Greg Peel

Since last years Ukraine invasion, a vast variety of sanctions have been placed on Russia, and steps taken with regard energy supply, but the question hanging over the nuclear energy market in the ensuing period has been will there, wont there, be sanctions placed on Russian uranium exports?

Russias uranium conversion capacity is some 38% of global capacity and Russias enrichment market share is some 48% of global supply.

To date, no such sanctions have been forthcoming, likely because of the energy crisis, most specifically in Europe, restraining oil and gas imports. Given the reliance of France and other European countries on nuclear power, to restrain another source at this time would only exacerbate the situation.

However, media reports late last week have suggested Russias state-owned nuclear company, Rosatom, has offered to supply Russias military complex with certain goods. In response, Ukrainian officials renewed their call for sanctions on Russias nuclear company and its officials, which drew concern from nuclear industry participants.

While nuclear power companies across the globe spent last year frantically attempting to secure future supply from anywhere other than Russia, more immediate needs are still being covered by existing Russian supply contracts. The global nuclear power industry cannot yet afford to lose this supply. Nor, it would seem, does Russia wish to lose the revenue stream, as no retaliation has been forthcoming vis a vis sanctions elsewhere in the form of uranium supply cuts.

The uranium market is thus nervous. Yet industry consultant TradeTech reports only two smallish transactions in the spot market last week. The typically quiet January period remains in place, and TradeTechs weekly spot price indicator fell -US$1.40 to US$48.80/lb last week.

Term markets were a lot more active in 2022, with utilities shying away from a spot market dominated by general financial market volatility, which did not reflect true demand-supply balance. While no new term market transactions were reported last week, TradeTech expects US and non-US utilities to be active buyers in term markets in 2023.

TradeTechs term price indicators remain at US$49.00/lb (mid) and US$53.00/lb (long).


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