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Uranium Week: Post Illinois Momentum

Weekly Reports | Dec 20 2016

The "landmark" decision to put uranium on equal footing with renewables, as far as government subsidies are concerned, by lawmakers in Illinois has injected renewed momentum into the spot uranium market, reports industry consultant TradeTech.

Illinois' "Future Energy Jobs Bill" is being described as a truly watershed event for the uranium market by TradeTech and others inside the industry.

The least we can conclude is that the ultra-bearishness overshadowing the uranium market throughout most of calendar 2016 has now been replaced with a more constructive view. On TradeTech's observation, both US utilities and intermediaries are stepping up, pulling their buying activity forward.

On Friday, TradeTech's weekly spot price indicator rose to US$20.25/lb, an increase of US$1.50 or 8% from the previous week. A total of 1.6 million pounds U3O8 equivalent were traded over the course of the week in 12 transactions.

The uptick in market activity has taken several sellers by surprise because usually this time of the year things quieten down. TradeTech's spot price temporarily reached as high as US$21/lb mid-week.

More positive news flowed from South Africa where state utility Eskom's intention is to reduce reliance on coal-fired power plants via the commissioning of new nuclear reactors.

TradeTech notes, in the term uranium market, one transaction is reported this week. A non-US utility, evaluating offers for 6.5 reloads of uranium contained in enriched uranium product (EUP), selected a preferred supplier.

The consultant's mid-term price indicator remains unchanged at US$19/lb, while its longer-term price indicator remains at US$34/lb.

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