Commodities | May 17 2016
By Greg Peel
For a long time, sellers of uranium have been convinced buyers of uranium must soon re-enter the market with more urgency in order to secure mid to long term supply. Every now and again the sellers have capitulated, no longer able to hold out, but amidst ongoing news of global supply curtailments there has been a reluctance of late to meet minimal buying interest.
Buyers did return last week, industry consultant TradeTech reports, to offer renewed signs of life to the spot uranium market. Transactions worth a total of almost one million pounds U3O8 equivalent were concluded, with utilities, traders and producers all involved. Each successive transaction traded at a higher price as the week progressed, as sellers backed away from more eager buying interest.
As a result, TradeTech’s weekly spot price indicator has risen US50c to US$28.10/lb.
Three transactions were concluded in the term markets last week, TradeTech reports. Moreover, one utility seeking 2.6mlbs for 2019-22 delivery has concluded its evaluation. A utility is seeking 1.2mlbs for delivery over 2018-20 and another is seeking interest for 1mlbs to be delivered every year from 2016 to 2029. Various other fresh term market enquiries have also emerged.
TradeTechs’ term market indicators remain unchanged for now at US$29.25/lb (mid) and US$42.00/lb (long).
In good news for uranium producers, the 2016 outlook published by the US Energy Information Administration last week revealed that renewables and nuclear power are presently the fastest growing energy sources globally. Renewable energy is expected to grow by a compound annual growth rate of 2.6% and nuclear by 2.3% out to 2040.
Nearly all of the projected net expansion in installed nuclear power capacity is accounted for by emerging markets, and led by China.
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