Uranium Week: Buyers On The Move

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By Greg Peel

Various uranium producing countries reported their annual production results last week. Once again Kazakhstan topped the global production numbers, pumping out 59.4mlbs of U3O8 in 2014. The US produced 4.9mlbs in 2014, up 5% on 2013.

It was a different story in Australia nonetheless, where production fell to 13.0mlbs compared to 16.5mlbs last year, to mark the lowest volume in sixteen years. The fall came despite the start-up of the Four Mile mine in South Australia, and mostly reflects loss of production at Energy Resources of Australia’s ((ERA)) Ranger mine in the Northern Territory due to a heap leach tank failure. BHP Billiton’s Olympic Dam ((BHP)) produced the bulk of Australia’s output, at 7.4mlbs.

On the demand side, China imported 55.4mlbs of U3O8 in 2014, up 11.5% from 2013. The average price for deliveries was US$43.18/lb, down from US$48.09/lb last year.

Two weeks ago saw minimal activity in the spot uranium market despite a line-up of buyer interest, given sellers decided to back off their prices. It was the right call it would seem, as last week the buyers broker ranks and hit the higher prices, sparking a busy week in which 1.1mlbs of U3O8 changed hands in eleven transactions. Utilities, traders and other intermediaries were all in buying, reports industry consultant TradeTech, while traders, who have been quietly accumulating product of late, accounted for 75% of the sales.

Traded prices reached as high as US$37.50/lb in the week, TradeTech notes, encouraging more sellers to enter the market. TradeTech’s spot price indicator settled at US$37.25/lb at week’s, and month’s end, up US50c from the week before.

Only one transaction involving a small quantity was concluded in the term market last week. TradeTech’s term price indicators remain unchanged at US$39/lb (mid) and US$50/lb (long).
 

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