Commodities | Mar 08 2016
By Greg Peel
Term uranium delivery contracts representing a net volume in excess of 20mlbs U3O8 equivalent are still out to tender with as yet no sign of settlement. Uranium sellers remain confident utilities are soon to re-establish buying interest, particularly at the longer end of the delivery market, but as each week goes by little eventuates.
Sellers have been expecting such interest to emerge since late last year. Meanwhile, volumes in the uranium spot market year to date are down 40% on last year to 5.6mlbs, industry consultant TradeTech reports. Transaction volumes are down 36% to 38. TradeTech’s weekly spot price indicator has spent the year drifting lower on lack of buying interest.
Last week saw 500,000lbs of U3O8 equivalent change hands in five spot transactions. There was utility interest on the buy-side, but not enough to prevent TradeTech’s spot price indicator falling another US$1.05 to US$31.10/lb.
Meanwhile, only 2.2mlbs changed hands in the term markets over the month of February. Trade Tech’s mid-term price indicator has fallen US$2.60 to US$33.90/lb. The consultant’s long-term indicator remains unchanged at US$44.00/lb.
There were no transactions in term markets last week.
The good news from last week, if there is any, is that the Indian government will allocate a further US$442m of its budget towards an effort to boost nuclear power generation projects over the next 15-20 years. India currently has 21 plants in operation and six under construction, with plans now in place for new reactors to be built in the Bihar, Haryana and Punjab provinces, which currently have no nuclear power capacity.
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