Weekly Reports | Mar 07 2023
Current uncertainty around geopolitical and jurisdictional risks is leading to a drying up of uranium spot market interest.
-Ongoing uncertainty as war continues
-Thin trading in U3O8 spot market
-Ongoing global push to extend nuclear capacity
By Greg Peel
The spot uranium market continued to show signs of limited liquidity last week, industry consultant TradeTech reports. Financial entities remain the primary buyer for delivery of spot uranium as utilities, traders, and others continue to look toward the mid- and longer-term markets for their purchases.
This appears counterintuitive since the current spot price sits below mid- and long-term uranium prices. However, not only is demand thin in the spot delivery window, but availability of material within the spot period of 90 days is thin as well.
Given the current uncertainty around geopolitical and jurisdictional risks that seems to increase as the war rages on, utilities, producers, and even traders will have taken action to cover their immediate spot needs and any discretionary or “have-to” buying under consideration generally calls for delivery later this year, Trade Tech notes.
On a lack of interest TradeTech’s weekly spot price indicator fell -US$1.35 last week to US$50.50/lb.
As at the end of February, the price was US$50.85/lb, slightly above end-January’s US$50.75/lb.
A total of 19 transactions involving 2.3mlbs U3O8 were recorded in February, up from 2mlbs in January. Financial entities, traders, utilities, and producers all concluded spot purchases during February.
Term
Buyers were active in the term uranium sector, TradeTech notes, with nine transactions reported in the mid- and long-term delivery windows. Several transactions call for mid-term delivery or involve a combination of mid- and long-term delivery windows.
TradeTech’s mid-term price indicator has fallen to $51.50/lb from $52.00/lb end-January. The long-term price indicator remains unchanged at US$53.00/lb.
Global Push
Eleven EU member states last week formed a cooperative alliance with the objective of “jointly reaffirming their desire to strengthen European cooperation in the field of nuclear energy.” The French Energy Transition Minister, who initiated the meeting, said the objective of the alliance was “to structure cooperation on the whole nuclear value chain” and provide Europe “with all the tools to reach carbon neutrality by 2050”.
Japan’s cabinet approved bills last week that will allow commercial nuclear reactors to operate beyond the current limit of 60 years. Following the 2011 Fukushima accident, Japan introduced stricter safety standards under a reactor regulation law that limits the operation of nuclear reactors to 40 years in principle and up to 60 years if safety upgrades are made.
The US Department of Energy has released guidance for application to the second award cycle of a Bipartisan Infrastructure Law-funded program that seeks to prevent the premature closure of US nuclear power plants due to financial challenges in certain markets.
One feels this global push to increase and extend nuclear power generation will not ultimately benefit Russia.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 06/03/2023 | 0.0380 |  – 2.56% |
$0.12 | $0.03 | |||
| BKY | 06/03/2023 | 0.3800 |  4.11% |
$0.64 | $0.25 | |||
| BMN | 06/03/2023 | 1.7850 | 5.00% |
$2.49 | $0.15 | |||
| BOE | 06/03/2023 | 2.5400 | – 1.55% |
$3.10 | $1.61 | $3.200 | 26.0% |
|
| DYL | 06/03/2023 | 0.6750 | 3.05% |
$1.25 | $0.55 | |||
| ERA | 06/03/2023 | 0.2050 | – 2.38% |
$0.42 | $0.16 | |||
| LOT | 06/03/2023 | 0.2100 | 0.00% | $0.46 | $0.18 | |||
| NXG | 06/03/2023 | 6.4100 | 5.43% |
$8.99 | $0.00 | |||
| PDN | 06/03/2023 | 0.7150 | 2.88% |
$0.97 | $0.53 | -71.0 | $1.000 | 39.9% |
| PEN | 06/03/2023 | 0.1450 | 0.00% | $0.28 | $0.12 | |||
| SLX | 06/03/2023 | 3.3600 | -15.37% |
$5.32 | $1.13 |
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