Weekly Reports | 11:00 AM
The uranium spot price fell on a lack of buyers as year end approaches, while broker's debate the demand/supply outlook for 2025.
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By Danielle Ecuyer
Uranium price outlook
UBS has flagged a more conservative outlook on the uranium price for 2025, following a decline in the U3O8 spot price of -15% in 2024 as buyers have largely remained on the sidelines. A similar proposition is put forward by the broker for the upcoming calendar year, as a shift in the demand/supply outlook now looks unlikely.
UBS lowers its uranium price forecast by -9% to US$78/lb for 2025 and by -6% to US$80/lb for 2026. The COP 29 nuclear announcements are perceived as more "incremental in nature" than structural for the global uranium outlook. While the flagged push by Big Tech into nuclear-powered solutions for growing AI power demands is highlighted as a sentiment boost, the impact on near-term demand is considered questionable.
In 2025, UBS expects global growth in nuclear reactors, with an accompanying increase in uranium consumption of around 3-4%, led by China and India. Supply growth is forecast to expand between 6-7%, including a rise in Kazatomprom's volumes of 12%, with added volumes from Paladin Energy ((PDN)) and Boss Energy ((BOE)).
Other factors that may play a role include the potential impact of a Trump presidency, risks from Nigerian supply, which represents around 4% of global supply, ongoing geopolitical tensions between the US and Russia regarding trade sanctions, and how NextGen Energy's ((NXG)) contracting activity unfolds.
Morgan Stanley's latest commodity update highlights an expected increase in contracting activity for 2025 with the market poised to remain in deficit for the year. This broker forecasts the U3O8 spot price to rise to US$90/lb by 2Q 2025.
Canaccord Genuity has highlighted reports Canadia is considering a US uranium export tax in response to President Trump's tariff threats.
The Canadian government is apparently considering export taxes on commodities including uranium, oil, and potash. Canada is the largest source of nuclear fuel for US power plants, with 25% of supplies coming from Canada.
The Week That Was for Spot Prices
TradeTech continues to observe U3O8 spot price volatility. Four transactions occurred on Tuesday, with the spot price vacillating by US$0.75/lb as sellers sought buyers for December settlement to meet some end-of-year financial goals. The industry consultants note sellers retreated on Thursday in response to reports the Canadian government was considering export tariffs to the US.
Saskatchewan Premier Scott Moe stated export taxes "are the wrong approach, and Saskatchewan will vehemently oppose the federal government imposing export taxes on our potash, uranium, or oil."
By Friday, the spot market had moved past these reports, with one transaction conducted at US$76.50/lb for delivery to Honeywell's ConverDyn facility in Illinois. A non-US utility continues to seek one "reload" of enriched uranium product for delivery in December or January, TradeTech highlights.
TradeTech's weekly U3O8 spot price indicator fell -US$0.25/lb to US$76.50/lb, down -8% on last month and around -17% for 2024. The consultant's mid-term U3O8 price indicator is US$83/lb, and TradeTech's long-term price indicator is US$82/lb.
Reportedly, a new ship is expected to arrive in St. Petersburg in the next few days, and enriched uranium that has yet to leave for the US is expected to be loaded on this ship, with US parties confident the appropriate paperwork and permits will be in place.
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