Weekly Reports | Dec 13 2022
There are as yet no sanctions on Russian uranium exports but price caps on other energy sources and further sanctions on shipping are leading more utilities away from Russian supply.
-Activity continues to rise in uranium term markets
-New sanctions on Russia increase uncertainty
-Tumbleweeds roll through spot market
By Greg Peel
Last week the European Commission approved its ninth package of sanctions against Russia, uranium industry consultant TradeTech notes. The EC has proposed further economic measures against the Russian energy and mining sector, including a ban on new mining investments in Russia.
These sanctions are in addition to a full European Union import ban on Russian seaborne oil that became effective last week, as well as the global oil price cap agreed to by the G7 nations (and Australia).
So where does this leave the uranium market? No specific sanctions have been imposed on Russian uranium exports as yet, given electricity costs in Europe have already skyrocketed on the gas crisis, but new sanctions do throw up uncertainty regarding the impact of logistical issues surrounding shipping, indemnification and government policy, TradeTech notes, which is encouraging some utilities to seek non-Russian fuel supplies.
One non-US utility issued a Request for Proposals on November 24, seeking over 5mlbs U3O8 equivalent contained in enriched uranium product, TradeTech reports. The utility is requesting material be delivered between 2023 and 2027, with optional quantities in 2028 through 2030, and has specified that the material be non-Russian in origin.
Increasing inquiries from utilities, along with expectations by sellers that prices will rise in the future, means that utilities are seeing a narrower range of pricing than what has been offered in recent months. Sellers are not only focusing on the price in their offers but are seeking longer-term commitments that extend beyond five years and preferably ten years.
Based on recently concluded transactions, TradeTech notes buyers have shown a willingness to meet sellers at the current price level. Buyers who are confining their purchases to the mid-term delivery period are seeing not only higher prices due to tightness of supply, but tighter terms around quantity flexibility.
That said, TradeTech’s term price indicators remain at US$51.00/lb (mid) and US$53.00/lb (long).
Meanwhile…
With all the action in term uranium markets, and further investment apparently drying up in the Sprott Physical Uranium Trust, the spot uranium market appears to have all but closed down for the year.
TradeTech’s weekly spot price indicator opened the week at US$48.00/lb and at that level there were willing buyers, but no sellers.
Until the last day of the week, when finally one seller buckled.
TradeTech’s spot price indicator is unchanged at US$48.00/lb.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 12/12/2022 | 0.0400 |  – 2.44% |
$0.12 | $0.04 | |||
| BKY | 12/12/2022 | 0.3050 | – 1.61% |
$0.64 | $0.17 | |||
| BMN | 12/12/2022 | 1.6600 | – 0.60% |
$2.49 | $0.15 | |||
| BOE | 12/12/2022 | 2.1400 | – 7.76% |
$3.10 | $1.61 | $3.200 |  49.5% |
|
| DYL | 12/12/2022 | 0.7100 | 1.43% |
$1.25 | $0.55 | |||
| ERA | 12/12/2022 | 0.2250 | – 6.25% |
$0.42 | $0.16 | |||
| LOT | 12/12/2022 | 0.2000 | – 4.76% |
$0.46 | $0.19 | |||
| NXG | 12/12/2022 | 6.0100 | -15.11% |
$8.99 | $0.00 | |||
| PDN | 12/12/2022 | 0.7000 | – 6.04% |
$0.97 | $0.53 | -122.2 | $1.000 | 42.9% |
| PEN | 12/12/2022 | 0.1250 | – 3.85% |
$0.28 | $0.13 | |||
| SLX | 12/12/2022 | 2.6300 | – 2.95% |
$4.14 | $0.99 |
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