Weekly Reports | Jan 30 2018
A petition to the US government threatens to ensure uncertainty in the uranium market for some time.
-US producers appeal to president's protectionist ilk
-Uncertainty rules
-Spot and term prices remain under pressure
By Greg Peel
Last week’s Uranium Week highlighted a petition filed with the US Department of Commerce by US uranium producers Ur-Energy and Energy Fuels. This petition has brought the uranium market to a screaming halt.
The petition requests that the DOC initiate a section 232 review of the Trade Expansion Act of 1962. The purpose of the Act is to protect national security industries that are under threat from imports. US uranium producers are under threat from “state-sponsored” producers which, although not specifically stated, would imply producers in Russia and Kazakhstan.
US producers would like to see a mandated requirement that US utilities purchase a minimum 25% of their requirements from US producers. US utilities have nevertheless warned that such a quota would force the early shutdown of some nuclear plants. For a protectionist president, such a quota would be consistent with current and evolving trade policy. But would Trump impose such a quota under the circumstances?
It may take a while to find out.
Sidelined
The DOC has ten days to decide whether or not to conduct an investigation. It then has 270 days to complete the investigation and report to the president. The president then has 90 days to take action. That’s a total of 370 days, or February next year.
For the next ten days at least, uranium market participants are sitting on the sidelines.
Industry consultant TradeTech reports four transactions in the spot market last week totalling 420,000lbs U3O8 equivalent. TradeTech’s weekly spot price indicator has fallen -US30c to US$23.00/lb.
The weekly indicator has either remained unchanged or fallen for seven consecutive weeks.
Two transactions were reported in term markets last week, totalling 400,000lbs for mid-term delivery. TradeTech’s term price indicators remain at US$28.00/lb (mid) and US$31.00/lb (long).
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