Weekly Reports | Oct 29 2024
Spot market participants are awaiting the International Uranium Fuel Seminar, but macro continues to underpin robust investment requirements for nuclear power projects.
-Spot uranium market quiet as a mouse
-Climate goals drive nuclear power investment
-Supply shortages are real
-The Boss's Honeymoon hums
By Danielle Ecuyer
Lack of participation drives price fall
Industry consultants TradeTech report a -US$2lb decline in the spot U308 price last week to US$81lb with only one transaction reported. Instead, all eyes are focusing on this week's upcoming International Uranium Fuel Seminar which is being hosted by the Nuclear Energy Institute in Kansas City, Missouri.
The seminar is expected to cover a wide-ranging series of topics relating to U308 markets, including Uranium Market Dynamics, Nuclear Fuel Technology, Regulatory and Policy issues, Environmental and Sustainability Considerations as well as Economic and Financial aspects.
TradeTech's Mid-Term U308 price indicator is US$86lb with a Long-Term price indicator of US$82lb.
The spot price has traded in a range between high-US$70's and mid-US$80lb since the middle of 2024, the consultants observe, with the price up 10% on a year earlier.
Nuclear energy news in focus
NextEra Energy's CEO reiterated at the quarterly earnings call the company is continuing to "investigate" re-opening the Duane Arnold Nuclear Power Plant in Iowa. The CEO stated "We're very interested in recommissioning the plant" noting the plant's reactor is of a simpler design which lends support to recommissioning at an affordable cost and without too much risk.
TradeTech highlighted the latest report, Climate Change and Nuclear Power 2024, from the International Atomic Energy Agency which stated nuclear power investment needs to advance to US$125bn a year by 2030 to meet global climate goals.
Investment is required in both new nuclear builds and ongoing operation of existing reactors from current levels of US$50bn p.a. to help realise the goals of a 2.5x times increase in nuclear capacity by 2050.
Taking a big picture approach
Global X ETF provider served up a bullish summary at the end of the September quarter on uranium prices which concentrates on the rising role of geopolitics in supply chains.
Uranium primary production is highlighted as below global nuclear reactor demand since 1991. Production in 2024 is estimated to be only 89% of global reactor demand.
The "disconnect" between demand and supply has been permitted to exist due to secondary supplies from a Cold War production boom which built up inventories prior to supply excesses post-Fukushima.
Decommissioning of weapons and tactical supplies satisfied as much as 50% of global demand between 1991 to 2013. Global X points to research from UxC which highlights commercial uranium supplies peaked in 2021 at 65mlbs during global lockdowns and have since declined to 17.5mlbs or 9% of total supply in 2024.
The prospect of uranium supply shortages is expected to be emphasised in 2024. Global nuclear reactors demand 176mlbs with uranium mine supply forecast to stop short at 156mlbs this year.
The World Nuclear Association is forecasting increasing energy consumption and decarbonisation will underpin uranium demand to around 40mlbs per annum in 2040.
US sanctions against Russian imports and a shifting Kazatomprom supply chain to the East from the West, as outlined in last week's Uranium Weekly (link below), pose supply risks and potential upward pressure on uranium prices.
Citi also provided commodity price updates, highlighting an ongoing upbeat stance on uranium prices. The broker sees upside to US$94lb in the next three months with 12-month prices reaching US$104lb.
The broker envisages demand continuing to rise as big tech expands its move into various aspects of nuclear energy assets.
Possible Russian export bans or limitations on uranium supply flows from Kazakhstan and Uzbekistan to western markets could have material impacts on prices.
Citi emphasises nuclear energy has bi-partisan support in the US "a rare exception during an election year".
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