Weekly Reports | Aug 08 2023
With global uranium supply disrupted by the war, the market now has Niger to worry about.
-Spot market quiet during holidays
-Long term prices rise above mid-term
-Coup in Niger is threatening uranium supply
By Greg Peel
As the northern summer holiday period extends into August, activity remains light in the uranium spot market. Industry consultant TradeTech reports sellers are happy to be patient and wait for demand to return, rather than lower prices.
Only one buyer was prepared to hit the offer in the uranium spot market last week, and two off-market transactions were concluded. TradeTech’s weekly spot price indicator has risen by US60c to US$56.80/lb.
The spot uranium market was relatively quiet throughout July, with transactions involving a total of approximately 1.8mlbs U3O8 equivalent reported for the month.
The shift from the spot delivery window to the mid- and long-term delivery time frames observed in June continued throughout the month of July, TradeTech reports. Active demand from utilities, traders and producers, and also financial entities, which previously concentrated on the spot market, continues to exert pressure on mid- and long-term uranium prices.
The market seems in agreement that future fuel demand will remain robust. The uncertainty is around when this demand will emerge in the market and how these needs will be met.
Sixteen transactions calling for delivery of 5mlbs U3O8 equivalent were concluded in the term period during July. Prices in transactions concluded for the mid-and long-term delivery windows shifted slightly during the latter half of the month, with the long-term price rising above the mid-term price for the first time since March.
TradeTech’s mid-term price indicator has fallen to US$57.25/lb at end-July from $58.50/lb at end-June. The long-term price indicator has risen to US$57.75/lb from US$56.00/lb.
Stockbroker Bell Potter continues to see evidence of an emerging contracting cycle for uranium. In 2023 to date, 118mlbs U3O8 has been sold under long-term offtake agreements, compared to around 130mlbs in all of 2022.
As TradeTech has also noted in recent months, utilities are preferencing security of supply — suppliers who operate in reliable jurisdictions and have experience in bringing uranium assets online — and are now looking out to 2030 for uranium requirements.
A New Threat
If it weren’t enough that Russia is causing significant disruption to global uranium supply, now market participants have Niger to be worried about. As noted last week, Niger produces some 5% of global uranium supply.
For now at least, TradeTech reports uranium exploration and mining operations in the country remain in service. French nuclear group Orano, which has been involved in uranium mining in Niger for 50 years, said, "Our teams are closely monitoring the events that took place on in Niger…Our activities are continuing".
Canada’s Global Atomic Corp, which is developing its Dasa Uranium Project in Niger, said on July 31 that its "entire team in the Republic of Niger is safe and the Dasa Project remains fully engaged in opening up access to the ore body and preparing the plant site for construction”.
Canada’s GoviEx Uranium, which is advancing its Madaouela Uranium Project in Niger, said this week its operations within the country continue as usual. "Our employees are safe and continue to work diligently…We are currently able to meet all of our obligations to employees and suppliers, and we anticipate this stability to persist”.
Given the coup leaders have ignored a deadline from West African neighbours to restore the government, one might assume the situation remains volatile.
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| AGE | 0.0350 |  0.00% |
$0.08 | $0.03 | ||||
| BKY | 02/01/2008 | 0.4200 | 0.00% |
$0.80 | $0.25 | |||
| BMN | 02/01/2008 | 1.6600 | 0.00% |
$2.49 | $1.19 | $3.200 |  92.8% |
|
| BOE | 2.9500 | 0.00% |
$3.29 | $1.97 | $3.440 | 16.6% |
||
| DYL | 02/01/2008 | 0.7800 | 0.00% |
$1.25 | $0.48 | $1.040 | 33.3% |
|
| EL8 | 0.3200 | 0.00% |
$0.64 | $0.27 | ||||
| ERA | 02/01/2008 | 0.0400 | 0.00% |
$0.30 | $0.03 | |||
| LOT | 0.2100 | 0.00% |
$0.30 | $0.15 | $0.530 | 152.4% |
||
| NXG | 7.2600 | 0.00% |
$7.61 | $0.00 | ||||
| PDN | 02/01/2008 | 0.7650 | 0.00% |
$0.96 | $0.52 | -22.8 | $1.080 | 41.2% |
| PEN | 02/01/2008 | 0.1050 | 0.00% |
$0.21 | $0.09 | $0.310 | 195.2% |
|
| SLX | 02/01/2008 | 3.3000 | 0.00% |
$5.32 | $2.56 | $5.800 | 75.8% |
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
