Commodities | Jun 28 2016
By Greg Peel
Last week the uranium market, like all markets, ended the week with news of the Brexit. As is well appreciated, the UK referendum result threw up more questions than answers. One question that arose is whether Brexit would impact on Britain’s planned program of new nuclear reactor building, which will be undertaken by foreign construction companies.
Britain’s nuclear industry experts took the opportunity to reiterate the UK must move forward with its build program, despite the vote to leave the EU, in order to meet emission targets. Power companies EDF Energy, NuGeneration and Horizon Nuclear Power emphasised their commitment to that program.
The Brexit decision did not have any impact on uranium trading last week, which remained relatively calm as Brexit turmoil raged on. Falls in the spot price in recent weeks did entice a few buyers into the market, industry consultant TradeTech reports, including utilities. Five transactions totalling 800,000lbs U3O8 equivalent were concluded.
Having fallen sharply the week before, TradeTech’s weekly spot price indicator has risen US80c to US$26.80/lb.
Beyond Brexit, the global uranium market continues to reel from announced planned closures of legacy US reactors due to economic unviability. What are not forthcoming are any counter-plans to upgrade old or build new reactors, despite an agreed need to do so. Last week Pacific Gas & Electric joined in the recent spate of US reactor closure announcements.
The company will close its Diablo Canyon Nuclear Station in 2025 and replace the two reactors with investment in a green portfolio of energy efficiency, renewables and energy storage. The announcement brings to an end a volatile relationship with community and environmental groups.
With regard new reactor building, the global nuclear industry delivered a strong operational performance and improvements in construction time in 2015, according to a report from the World Nuclear Association. The report suggests that in order to meet climate change targets, the world, including the UK, will need to accelerate the rate of construction.
Two transactions were reported in the uranium term markets last week, involving delivery contracts beginning in 2018. TradeTech’s term price indicators remain unchanged at US$29.00/lb (mid) and US$41.00/lb (long).
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