Weekly Reports | Oct 06 2020
As the weekly uranium price remains unchanged, President Trump declares a mineral supply chain national emergency.
-Over reliance by US upon “foreign adversaries” for imports
-Pending uranium supply contract between Kazakhstan and India
-Weekly spot prices are unchanged
By Mark Woodruff
US President Donald Trump signed an Executive Order on September 30, aimed at expanding domestic production of rare earth minerals vital to critical manufacturing sectors in an effort to reduce dependence on imports from China.
The Executive Order declares a national emergency in the mining industry and directs the US Department of the Interior (DOI) to explore using the Defence Production Act to speed the development of mines.
“A strong America cannot be dependent on imports from foreign adversaries for the critical minerals that are increasingly necessary to maintain our economic and military strength in the 21st century," Trump said in the Executive Order".
The Executive Order refers to a list of 35 critical minerals, including uranium, drawn up by the DOI in response to a 2017 Executive Order by President Trump, explains industry consultant TradeTech. These minerals are identified as being essential to the economic and national security of the US and having supply chains that are vulnerable to disruption. Additionally, they are identified as serving "an essential function in the manufacturing of a product, the absence of which would have significant consequences for our economy or our national security."
While the Executive Order is not likely to affect US uranium trade or imports, notes TradeTech, the critical minerals list also includes zirconium, which is used in nuclear fuel fabrication, and vanadium, which is a by-product of certain uranium deposits.
Mark Chalmers, president and CEO of US uranium and vanadium producer Energy Fuels, said the company strongly supported the President's declaration. However, he added that despite expressing strong support for domestic uranium producers, the Administration has not yet turned this into "definitive" actions. "Energy Fuels will continue our efforts in Washington DC towards seeing that last night's announcement results in real, tangible support for US uranium, vanadium and rare earth element producers."
Country News
Kazakhstan and India have held talks on cooperation in the field of peaceful use of atomic energy, the press service of the Kazakh Energy Ministry said on October 1.
During a recent meeting, government officials discussed issues related to the supply of Kazakh uranium to India and outlined agreements for a new contract that will be finalised by year end, according to a Kazakh Energy Ministry statement.
As the leading producer since 2009, Kazakhstan produced 43% of the world's uranium last year, notes TradeTech. The government of India is committed to expanding the nation's nuclear power program as part of a broad infrastructure development program. The government has set ambitious targets to grow nuclear capacity.
Uranium Pricing
TradeTech’s Weekly Uranium Spot Price Indicator was unchanged at US$30.00/lb last week.
Although the weekly spot price has trended downward since May, the indicator has increased nearly 21% overall in 2020, averaging a 0.5% weekly increase in 2020. TradeTech's average weekly uranium spot price for 2020 is US$29.68/lb per pound, US$3.85/lb above the 2019 average.
Buying interest was sluggish in September and remains so as October begins. The concerted focus on securing an extension to the Russian Suspension Agreement (RSA) has occupied the attention of utilities for several months. Now that a draft agreement has been reached, many sellers are optimistic that utilities will return to the market and buying activity will increase, explains TradeTech. However, it may be several weeks before demand picks up significantly, as utilities are in the process of evaluating the current market and their individual portfolios.
The lack of significant utility demand in past months has led sellers to compete more aggressively in the mid-term market. However, utilities seeking longer-term offers are finding that sellers are far less flexible in lowering their offer prices due to their need for higher prices to adequately cover their future production costs.
TradeTech's term price indicators are at US$34.00/lb (mid) down -US$0.50/lb from end-August, and US$37.00/lb (long) unchanged.
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