Weekly Reports | May 28 2024
The uranium market has been pleasantly surprised by the rather soft guidance on waivers included in the legal ban to import uranium from Russia into the USA.
-US uranium import waivers more relaxed than expected
-Traders push up prices pre announcement
-Utilities move to consider longer term (post 2028) U3O8 contracts
By Danielle Ecuyer
As also reported in last week's update, utilities and traders have been occupied with the US Department of Energy's (DOE) waiver details for the Prohibiting Russian Uranium Imports Act which will go into effect 90 days after President Biden signed it on May 13.
The Act allows for temporary waivers under specific circumstances and any waiver must be terminated by the cut-off date, January 1, 2028 with the ban in place until December 31, 2040.
Industry consultant TradeTech reports the spot uranium market was noticeably active over Monday 20 May and Tuesday 21 May, with over one million pounds of U3O8 traded in anticipation of the waiver details. Prices rose to US$92.25/lb on the Tuesday from US$91.75/lb on the Monday.
The first reaction from the market was to cease activity as the waiver details were assimilated. Upon inspection, the market and experts concluded the watermark for waiver conditions was not overly challenging.
Some sellers responded to the waiver conditions by lowering offer prices and by Wednesday the spot price offer had declined to US$91.90/lb for U3O8 with buyers abstaining until Thursday.
As at the close of business on the week ending May 24, the price stood at US$91.50/lb with a buy offer sitting at US$91.00/lb.
TradeTech reports the seller (offer) met the buyer's bid after the market closed, but no trade was executed due to failure by both parties to agree to the terms.
The weekly U3O8 spot indicator was set at US$91.25/lb up US$0.25, with the Mid-Term price at US$95/lb and the Long-Term price at US$80/lb versus a production cost indicator for the industry of US$56.90/lb.
While there is no near term pressure on US utilities to find replacement material for imports coming from Russia, the waiver process now means they need to secure supply ex-Russia from 2028 onward.
Accordingly, sellers have raised offer prices to more advantageous terms and conditions. One non-US utility is considering offers of in excess of 21m pounds of U3O8 or equivalent with the first delivery requested in 2026, with additional deliveries towards 2039.
As per TradeTech, US utilities are watching the market ahead of issuing Request for Proposals (waivers) in the coming months.
More reading:
–https://fnarena.com/index.php/2024/05/21/uranium-week-russia-banned-from-august/
–https://fnarena.com/index.php/2024/05/14/uranium-week-us-boycott-enthusiasm-fades/
–https://fnarena.com/index.php/2024/05/07/uranium-week-finally-a-ban/
–https://fnarena.com/index.php/2024/04/30/uranium-week-nuclear-power-and-ai/
Uranium companies listed on the ASX:
| ASX CODE | DATE | LAST PRICE | WEEKLY % MOVE | 52WK HIGH | 52WK LOW | P/E | CONSENSUS TARGET | UPSIDE/DOWNSIDE |
|---|---|---|---|---|---|---|---|---|
| 1AE | 24/05/2024 | 0.0800 |  -11.11% |
$0.19 | $0.05 | |||
| AGE | 24/05/2024 | 0.0600 | – 1.54% |
$0.08 | $0.03 | $0.100 |  66.7% |
|
| BKY | 24/05/2024 | 0.3950 | 2.60% |
$0.80 | $0.26 | |||
| BMN | 24/05/2024 | 4.4300 | – 6.78% |
$4.87 | $1.19 | $7.400 | 67.0% |
|
| BOE | 24/05/2024 | 5.3500 | – 8.21% |
$6.12 | $2.62 | 54.8 | $5.425 | 1.4% |
| DYL | 24/05/2024 | 1.6500 | – 4.08% |
$1.83 | $0.53 | $1.770 | 7.3% |
|
| EL8 | 24/05/2024 | 0.5300 | – 1.82% |
$0.68 | $0.27 | |||
| ERA | 24/05/2024 | 0.0500 | – 2.00% |
$0.08 | $0.03 | |||
| LOT | 24/05/2024 | 0.4500 | – 3.16% |
$0.49 | $0.17 | $0.660 | 46.7% |
|
| NXG | 24/05/2024 | 11.7100 | – 4.81% |
$13.66 | $5.78 | $17.500 | 49.4% |
|
| PDN | 24/05/2024 | 15.7100 | – 9.15% |
$17.98 | $5.15 | -465.0 | $16.470 | 4.8% |
| PEN | 24/05/2024 | 0.1100 | -12.50% |
$0.20 | $0.08 | $0.310 | 181.8% |
|
| SLX | 24/05/2024 | 6.0100 | – 5.93% |
$6.74 | $2.92 | $7.600 | 26.5% |
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