Weekly Reports | Jan 23 2024
Ongoing supply disruptions and uncertainty are leading to ever-higher uranium prices as sellers back off their offers.
-Supply disruptions in Kazakhstan and Niger
-Expectation US Senate will pass Russian uranium import ban
-U3O8 spot price rises further
By Greg Peel
Uranium market participants gathered in Washington last week for the Nuclear Energy Institute’s Nuclear Fuel Supply Forum. Such annual gatherings – of which there are several for the uranium industry at large – typically lead to a lack of activity in the spot market.
That’s not the only reason only two transactions were concluded in the spot market last week. As industry consultant TradeTech notes, sellers are seeking to capitalise on the recent spot price surge, and buyers are reluctant to pay up.
Indeed, primary discussion at last week’s Forum centered around the recent price rise and factors that could provide relief to the strained supply chain, which if left unchecked could lead to additional price increases.
TradeTech’s weekly spot price indicator rose US$2.00 to US$106.00/lb last week, and is up 117% from its 2023 low of US$48.80/lb marked one year ago.
Supply
Global uranium supply issues have centred around Kazakhstan, Russia and Niger. In Kazakhstan, Kazatomprom has downgraded supply expectations due to delays to new construction and difficulty in sourcing the sulphuric acid required in the production process.
In the latter case, Kazatomprom has joined with the Kazakh sovereign wealth fund and an Italian company to attract investment in a project to build a new sulphuric acid plant in Kazakhstan.
In the case of Russia, the US House has passed a bill banning imports of Russian enriched uranium. The Senate is yet to pass the bill, but is expected to do so shortly now Congress is back from its holiday recess. The House bill does come with exemptions, intended to maintain supply to US reactors until alternative sources can be secured, but these have yet to be fully clarified.
Following a visit to Moscow by the Nigerian prime minister, Russia and Niger have “agreed to intensify joint actions stabilise the situation in the region,” which was destabilised in July last year following a military coup. Niger was supplying some 25% of European uranium demand, but production and development have since been plunged into uncertainty.
Most notable with regard the recent uranium price surge is that is all about supply constraints and not about demand from financial entities, such as the Sprott Physical Uranium Trust, as was the case particularly in 2022, and to a lesser extent last year.
Term Market
Buyers and sellers are taking similar steps in the term uranium market as those witnessed in the spot uranium market, notes TradeTech. Both are reassessing their strategies and portfolio positions in order to better position themselves in the wake of the rise in the spot uranium price.
Some sellers are re-evaluating their willingness to commit to delivery of additional material at prices contained in outstanding offers.
Many utilities have taken action to reduce their risk in the event of a disruption in Russian supply, but the probability of additional logistical and delivery difficulties increases with a Russian ban and an unclear waiver process on the horizon. For the term markets, this has already resulted in higher offer prices than those extended only a few weeks ago, TradeTech reports.
TradeTech’s term price indicators remain at US$93.00/lb (mid-term) and US$68.00/lb (long).
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 19/01/2024 | 0.1600 |  – 5.88% |
$0.18 | $0.05 | |||
| AGE | 19/01/2024 | 0.0750 | – 3.85% |
$0.08 | $0.03 | $0.100 |  33.3% |
|
| BKY | 19/01/2024 | 0.3250 | 8.33% |
$0.80 | $0.26 | |||
| BMN | 19/01/2024 | 3.6100 | 0.56% |
$3.77 | $1.19 | $3.200 | -11.4% |
|
| BOE | 19/01/2024 | 5.4000 | – 3.23% |
$5.67 | $2.02 | 92.0 | $4.763 | -11.8% |
| DYL | 19/01/2024 | 1.4750 | – 1.34% |
$1.59 | $0.48 | $1.640 | 11.2% |
|
| EL8 | 19/01/2024 | 0.5900 | 3.51% |
$0.61 | $0.27 | |||
| ERA | 19/01/2024 | 0.0690 | 16.95% |
$0.30 | $0.03 | |||
| LOT | 19/01/2024 | 0.3250 | – 2.99% |
$0.35 | $0.15 | $0.530 | 63.1% |
|
| NXG | 19/01/2024 | 11.7500 | – 0.76% |
$12.35 | $5.11 | |||
| PDN | 19/01/2024 | 1.2300 | – 5.02% |
$1.33 | $0.52 | 191.6 | $1.190 | – 3.3% |
| PEN | 19/01/2024 | 0.1200 | – 7.69% |
$0.20 | $0.08 | $0.250 | 108.3% |
|
| SLX | 19/01/2024 | 4.9200 | – 7.52% |
$5.39 | $2.92 | $5.800 | 17.9% |
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