Weekly Reports | Apr 04 2023
Concerns over the availability of enriched uranium are growing amongst utilities as the uranium spot market remains quiet.
-Spot uranium activity remains light
-Global nuclear demand growing
-Concerns over enriched uranium supply building
By Greg Peel
Trading activity remained light in the uranium spot market last week, industry consultant TradeTech reports, with few active buyers or sellers coming forward. A total of five transactions, involving 550,000/lb U3O8 were reported for the week.
TradeTech’s weekly spot price indicator rose US25c to US$50.60/lb last week, finishing the month down from US$50.85/lb at end-February.
Sellers are closely monitoring the wider financial markets, as well as increased activity in the uranium conversion and enrichment markets, for signals that buyers will be moving into the uranium market in coming weeks.
Meanwhile, the prospects for the nuclear power industry globally are growing almost daily as countries and policy makers announce or confirm commitments to include nuclear in their energy portfolios in an effort to forge energy independence and reduce their carbon footprint.
End-users are increasingly confident in the continuation of their future operations, TradeTech notes. Along with this long-term optimism comes renewed interest from the financial community and recognition that global trade within the nuclear fuel supply chain is subject to disruption.
New sanctions on Russian entities and individuals in the US and the UK (including on executives of Russia’s state-owned uranium producer Rosatom), combined with evolving legislation in the US, have placed added pressure on nuclear fuel buyers in the world’s largest markets to ensure security of forward supply.
This is currently reflected most starkly in TradeTech’s SWU price indicators. The mid-term SWU indicator presently sits above both spot and long-term values, which represents particular concern among fuel buyers about the availability of enriched uranium product (EUP) over the next few years.
Russia is the world’s largest exporter of EUP.
SWU
Natural uranium consists largely of two isotopes, uranium 235 and uranium 238. The less-abundant 235 is important for nuclear reactors and weapons because it is the only isotope existing in nature to any appreciable extent that can sustain a fission chain reaction.
Uranium 235 need only be enriched by 3-5% for use in nuclear reactors while to reach weapons-grade, you need 85% enrichment.
The capacity of enrichment plants is measured in terms of separative work units (SWU). The SWU is not a unit of energy, but rather expresses the amount of effort (work) involved in enriching an amount of uranium from feed concentration to product concentration, leaving a depleted residue known as tails.
At the end of March, TradeTech’s term price U3O8 indicators remained at US$51.50/lb (mid) and US$53.00/lb (long).
The enrichment process is not cheap, and TradeTech’s SWU term price indicators were unchanged at US$145/lb (mid) and US$140/lb (long), above a spot SWU level of US$130/lb, up from US$125/lb in February.
Six transactions were reported in term (U3O8 equivalent) markets in March. Several buyers are considering purchases that involve mid-term delivery or a combination of mid- and long-term deliveries, TradeTech reports. Additionally, buyers are considering purchases of uranium contained in a variety of forms, be it U3O8, UF6, or EUP.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 03/04/2023 | 0.0380 |  5.56% |
$0.11 | $0.03 | |||
| BKY | 03/04/2023 | 0.3850 | 13.24% |
$0.46 | $0.25 | |||
| BMN | 03/04/2023 | 1.6100 | 18.38% |
$2.49 | $0.15 | |||
| BOE | 03/04/2023 | 2.4900 | 11.66% |
$3.10 | $1.61 | $3.310 | 32.9% |
|
| DYL | 03/04/2023 | 0.6350 | 17.59% |
$1.25 | $0.51 | $1.040 | 63.8% |
|
| ERA | 03/04/2023 | 0.2050 | 2.50% |
$0.42 | $0.16 | |||
| LOT | 03/04/2023 | 0.2200 | 29.41% |
$0.46 | $0.15 | $0.350 | 59.1% |
|
| NXG | 03/04/2023 | 5.9200 | 8.23% |
$8.99 | $0.00 | |||
| PDN | 03/04/2023 | 0.6500 | 7.44% |
$0.97 | $0.53 | -19.4 | $1.097 | 68.7% |
| PEN | 03/04/2023 | 0.1650 | 22.22% |
$0.28 | $0.12 | 165.0 | $0.340 | 106.1% |
| SLX | 03/04/2023 | 3.9100 | 5.68% |
$5.32 | $1.22 | $5.000 | 27.9% |
Find out why FNArena subscribers like the service so much: "Your Feedback (Thank You)" – Warning this story contains unashamedly positive feedback on the service provided.
FNArena is proud about its track record and past achievements: Ten Years On
