Weekly Reports | Feb 07 2023
A renewed risk-on mood in financial markets in 2023 has rekindled speculation in the uranium spot market.
-U3O8 spot activity fired up again last week
-SPUT the main buyer
-EU/US looking at sanctions on Russian uranium exports
By Greg Peel
The desire shown by many countries to reduce carbon emissions and secure energy independence have re-instilled an optimism within the global nuclear industry that has not been witnessed in decades, industry consultant TradeTech notes, and has generated renewed interest from the financial community in the sector.
A total of over 1.2mlbs U3O8 changed hands last week in eight transactions, as activity surged in the spot uranium market. TradeTech’s weekly spot price indicator is up US$0.50 at US$51.00/lb.
The Sprott Physical Uranium Trust raised approximately US$81.2m and purchased over 977,000lbs U3O8 in January. SPUT currently holds nearly 60mlbs U3O8 in inventory, TradeTech reports, and its trading price has returned to a slight premium to net asset value.
It was a sluggish start to January in the spot market, which is not unusual seasonally, with the month seeing a total of 2mlbs changing hands in the month – 1.2mlbs in the last week. The main driver was SPUT.
The spot uranium price closed the month at US$50.75/lb, up from US$47.60/lb in December.
The Russia Dilemma
On Friday, the European Parliament urged European leaders to extend sanctions introduced on Russia to include nuclear energy. A motion passed that not only calls for expanding sanctions but also includes military assistance for Ukraine and steps toward the country joining the EU.
In the US, a joint legislative hearing will be held tonight, with members of the US House Energy & Commerce Committee, Energy, Climate, & Grid Security Subcommittee, and Environment, Manufacturing, & Critical Materials Subcommittee discussing solutions to restore American energy dominance, TradeTech reports.
The ongoing war and the suspicion that Russia’s Rosatom may have assisted in providing components to arm Russia’s war efforts have prompted new concerns that the flow of Russian nuclear fuel to European or US utilities could be interrupted.
This could be the result of indirect sanctions, transportation logistics, banking and counterparty risks, and any number of other factors that may interfere with the timely delivery of material.
Term Markets
Increasing inquiries from utilities and expectations by sellers that prices will rise in the future means utilities are seeing a wider range of pricing in term uranium offers, TradeTech reports.
Sellers are not only focusing on the price in their offers but examining the effect that currency rates and inflation may have on their future operations.
TradeTech’s monthly mid-term price indicator has risen US$3.00 to US$52.00/lb. The long-term indicator remains at US$53.00/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 | 06/02/2023 | 0.0500 |  – 4.26% |
$0.12 | $0.03 | |||
| BKY | 06/02/2023 | 0.4400 |  3.53% |
$0.64 | $0.21 | |||
| BMN | 06/02/2023 | 1.8600 | – 2.86% |
$2.49 | $0.15 | |||
| BOE | 06/02/2023 | 2.4100 | – 5.84% |
$3.10 | $1.61 | $3.200 | 32.8% |
|
| DYL | 06/02/2023 | 0.7700 | – 4.38% |
$1.25 | $0.55 | |||
| ERA | 06/02/2023 | 0.2500 | 0.00% | $0.42 | $0.16 | |||
| LOT | 06/02/2023 | 0.2300 | -10.00% |
$0.46 | $0.18 | |||
| NXG | 06/02/2023 | 6.7200 | – 2.62% |
$8.99 | $0.00 | |||
| PDN | 06/02/2023 | 0.7600 | -10.00% |
$0.97 | $0.53 | -175.5 | $1.000 | 31.6% |
| PEN | 06/02/2023 | 0.1600 | 3.45% |
$0.28 | $0.12 | |||
| SLX | 06/02/2023 | 4.3000 | – 5.83% |
$4.90 | $1.04 |
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