Weekly Reports | Jul 11 2023
Holidays in the US and Canada last week led to a lacklustre uranium market.
-Quiet holiday week
-Uncertainty reigns in term uranium markets
-Canada embraces “transition” power
By Greg Peel
Public holidays in the US and Canada on top of northern summer holidays in general ensured a quiet week in uranium markets last week.
Industry consultant TradeTech reports only three transactions in the spot market, which involved a total of 300,000lbs U3O8. While sellers lowered their offer prices over the week, buyers were largely absent.
TradeTech’s weekly spot price indicator is down -US70c at US$55.30/lb.
In the mid- and long-term uranium segments, concerns around logistics continue to weigh on market participants, Trade Tech notes. Transportation, insurance, banking, counterparty risks, and pending legislation in the US and EU, along with existing sanctions in the UK that could impact nuclear fuel imports from Russia, are all issues that present uncertainty for buyers and sellers.
In response, utilities have adjusted their expectations and are taking steps to prepare in the case of unexpected supply disruptions.
Buyers are employing various strategies to mitigate their portfolio risk due to potential supply disruptions, which include exercising options or quantity flexibility in existing contracts and slowly adding to inventory on a discretionary and opportunistic basis, while continuing to pre-emptively secure future supplies from jurisdictions that are viewed as less risky than Russia.
TradeTech’s term price indicators remain at US$58.50/lb (mid term) and US$56.00/lb (long).
Not Easy Being Green
As more and more countries embrace net zero carbon goals in the net decade or so, it has become increasingly evident that in that time frame renewables will just not cut it. Hence, many countries are electing to adopt nuclear power as a “transition” energy.
Nuclear energy is zero-carbon but only when a plant is up and running. Construction and fuelling are far from zero-carbon, and so too is uranium mining which is still needed to feed an operating reactor.
The goal to move away from previous reliance on Russian fossil fuel supply, particularly in Europe, is the driving factor. The next step is to move away from Russian uranium supply, as noted above.
Canada is the latest country to jump on the nuclear bandwagon.
The Canadian province of Ontario said last week it is supporting plans to build new nuclear power generation capacity and will work with utilities to advance large-scale and small modular reactor (SMR) projects.
Canada is developing plans to mandate a net-zero power grid by 2035, and a project at Bruce Power's Bruce Nuclear Station would be the first conventional nuclear plant in the province in three decades. In addition, Ontario Power Generation is advancing plans to develop four SMRs at its Darlington Nuclear Station for deployment over the 2034-2036 time frame.
In addition, OPG is advancing plans to develop four SMRs at its Darlington Nuclear Station for deployment over the 2034-2036 time frame.
As one of the world’s largest producers of uranium, Canada should have little problem sourcing material.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 07/07/2023 | 0.0300 |  – 2.86% |
$0.08 | $0.03 | |||
| BKY | 07/07/2023 | 0.6500 | – 1.47% |
$0.80 | $0.25 | |||
| BMN | 07/07/2023 | 1.5400 | – 7.62% |
$2.49 | $1.19 | $3.200 |  107.8% |
|
| BOE | 07/07/2023 | 2.9800 | – 3.92% |
$3.29 | $1.76 | $3.440 | 15.4% |
|
| DYL | 07/07/2023 | 0.7100 | – 4.79% |
$1.25 | $0.48 | $1.040 | 46.5% |
|
| EL8 | 07/07/2023 | 0.3000 | 0.00% | $0.64 | $0.27 | |||
| ERA | 07/07/2023 | 0.0320 | 3.23% |
$0.30 | $0.03 | |||
| LOT | 07/07/2023 | 0.1800 | – 2.78% |
$0.30 | $0.15 | $0.470 | 161.1% |
|
| NXG | 07/07/2023 | 6.6600 | – 4.86% |
$7.21 | $0.00 | |||
| PDN | 07/07/2023 | 0.7400 | – 1.35% |
$0.96 | $0.52 | -21.3 | $1.080 | 45.9% |
| PEN | 07/07/2023 | 0.1700 | – 5.71% |
$0.21 | $0.12 | $0.340 | 100.0% |
|
| SLX | 07/07/2023 | 3.6700 | – 7.25% |
$5.32 | $2.25 | $5.800 | 58.0% |
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