Commodities | Oct 11 2016
The spot uranium price actually moved up last week for the first time in over two months.
By Greg Peel
The pace of Japanese nuclear reactor restarts remains as glacial as ever. The count had reached three, in the five years since the Fukushima disaster, until safety concerns raised by the new governor of Kagoshima threatened the closure of the first reactor to be restarted, Kyushu Electric’s Sendia unit 1.
A court battle was averted given Sendai 1 was due for a regular maintenance shutdown anyway, which will last for several months. During the shutdown the reactor will be subject to “special inspections” to satisfy the new governor.
Sendai unit 2 will also be shut down for maintenance beginning in December, at which point Shikoku Electric’s Ikata unit 3 will be the only reactor in operation. Kansai Electric’s Mihama unit 3 is moving closer to being the fourth reactor to restart but there are several design and safety approval hoops Kansai must jump through before that might become a reality.
Prior to Fukushima Japan boasted 54 operating reactors.
The restart of Japanese reactors was for a while considered the major swing factor for the global uranium industry, but producers have long given up backing that horse. With the spot uranium price wallowing under US$30/lb it is assumed the only likely driver of any price recovery will be reduced supply. Demand is expected to be stronger at such lower prices, but not in any urgent manner.
Following the 8% fall in the spot price the week before, and -14% in September, there was some interest generated from the demand side last week. This prompted sellers who appeared rather desperate the week before to back off a bit and wind back prices. Industry consultant TradeTech reports four transactions in the spot market last week totalling 500,000lbs U3O8 equivalent.
TradeTech’s weekly spot price indicator has risen US65c to US$22.90/lb. This represents the first weekly price rise since end-July, following nine straight weeks of flat or falling prices.
While several utilities are presently evaluating purchases in uranium term markets, no transactions were reported last week. TradeTech’s term price indicators remain at US$23.70/lb (mid) and US$37.00/lb (long).
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