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Uranium Week: Volatility Remains

Weekly Reports | May 09 2023

After sparking up the week before, volatility as again evident in the uranium spot market last week.

-Spot uranium bouncing around
-Delivery location a factor
-Reactor building continues apace

By Greg Peel

Volatility continued in the uranium spot market last week, industry consultant TradeTech reports. After closing out April at US$53.75/lb U3O8, the spot price dropped to US$53.00/lb last Monday following the conclusion of a transaction at that price level. The price rebounded on Tuesday, as buyers motivated by the unexpected drop in the price stepped into the market to pick up material.

Other buyers continued to acquire material through Thursday at the US$53.35/lb level, which is where TradeTech’s weekly spot price indicator closed out the week, down -US40c from the week prior.

However, the weekly volatility is not as much about a wild market as it is a mismatch between buyers’ preferred delivery location, with lower priced material available at delivery points in France and Canada than in the US.

TradeTech’s weekly spot price indicator is up 6% in the last two months on increased transaction volumes. The indicator is down -3% from one year ago and is up approximately 9% from the beginning of the year.

The average weekly spot price in 2023 is US$50.86/lb U3O8 — 2.4% above the 2022 average.

Demand

The prospects for the nuclear power industry continue to increase globally, TradeTech reports, 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.

India, in particular, continues to advance plans for new nuclear plants as the nation’s reliance on coal-fired power plants works against future climate goals.

Reactor technology also continues to forge ahead, with US-based Westinghouse launching its newest nuclear technology last week — the AP300 small modular reactor (SMR), which is a a 300MW single-loop pressurised water reactor, in case you were wondering.

In addition, the Korea Trade Insurance Corp and the Export-Import Bank of Korea have each signed agreements with a US-based Holtec International-Hyundai Engineering & Construction joint venture to provide financial backing for global project to build Holtec’s SMR, the SMR-160.

In the term uranium market, utilities and suppliers are faced with growing optimism combined with concerns over the ability of the market to meet the demand challenges in a timely and cost-effective manner, TradeTech reports.

Offers were due last Friday to a US utility seeking over 6mlbs U3O8 for delivery contained in enriched uranium product (EUP) or components for reloads over the 2025-2030 period.

TradeTech’s term price indicators remain at US$54.00lb for both mid- and long-terms.

Uranium companies listed on the ASX:

ASX CODE DATE LAST PRICE WEEKLY % MOVE 52WK HIGH 52WK LOW P/E CONSENSUS TARGET UPSIDE/DOWNSIDE
AGE 08/05/2023 0.0350 9.38% $0.08 $0.03
BKY 08/05/2023 0.3700 0.00% $0.46 $0.25
BMN 08/05/2023 1.3900 4.91% $2.49 $0.15
BOE 08/05/2023 2.6900 6.75% $3.03 $1.61 $3.310 23.0%
DYL 08/05/2023 0.5700 10.68% $1.25 $0.48 $1.040 82.5%
EL8 08/05/2023 0.3500 9.38% $0.64 $0.30
ERA 08/05/2023 0.0390 – 4.88% $0.34 $0.04
LOT 08/05/2023 0.1900 5.56% $0.30 $0.15 $0.350 84.2%
NXG 08/05/2023 5.7800 0.52% $7.51 $0.00
PDN 08/05/2023 0.6550 3.97% $0.96 $0.53 -19.5 $1.097 67.4%
PEN 08/05/2023 0.1550 10.71% $0.22 $0.12 155.0 $0.340 119.4%
SLX 08/05/2023 3.4200 4.27% $5.32 $1.22 $5.000 46.2%

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