Commodities | Mar 04 2008
By Rudi Filapek-Vandyck
Ongoing power problems at South Africa’s main utility Eskom have inserted some more doubts and supply worries into the global uranium industry with Nuclear Fuels Corp of South Africa (Nufcor) notifying its customers last week it may have to trigger the “force majeure” clause in its supply contracts, though Nufcor stressed it has no intention to do so in the short term.
Whatever will come from it, the renewed uncertainty about how much supply will actually hit the global uranium market this year hasn’t stopped the spot price from falling below the US$75/lb threshold with industry consultant TradeTech following the lead from peer Ux Consulting last week and lowering its weekly spot price indicator for U3O8 by US$2 to US$73/lb.
TradeTech reports market participants proved pretty active in February with eight transactions being concluded totaling over 2.7 million pounds U3O8 equivalent. Amongst these was Toronto listed Uranium Participation Corp who announced it had managed to raise circa US$66.4m to add another 900,000 pounds of U3O8 to its uranium reserves. UPC reportedly holds about 4.5 million pounds U3O8 and 1.4 million kgU as UF6 with a total market value of C$655 million (US$669 million).
TradeTech’s long term price indicator remains unchanged at US$95/lb.
Fellow industry consultant UxC has just released an in-depth outlook on the industry. The report predicts that the amount of countries that (partly) rely on nuclear energy for their national power needs will grow from 31 this year to 44 countries by 2020, to 58 countries by 2030. Over that period the number of nuclear power reactors in those countries is expected to increase from the current 440 to 533 (up 30%) by 2020, to 642 by 2030. On UxC’s projections total nuclear power stations’ capacity in 2030 will have grown by 78% since 2008.
