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Uranium Week: Preparing For Volatility

Weekly Reports | Nov 01 2022

The uranium spot market went quiet last week ahead of the Fed meeting and other crucial US events.

-Spot U3O8 market quiet
-Term markets active
-Canada in the spotlight

By Greg Peel

There was not a lot of interest in the uranium spot market last week, with only 300,000/lbs U3O8 changing hands in three transactions. Sellers were forced to drop prices to encourage any buyers, hence industry consultant TradeTech’s weekly spot price indicator fell -US25c for the week to US$52.50/lb.

Given the spot market is beholden to general financial market volatility, it is likely the market went quiet ahead of this week’s Fed meeting. It will be followed by the US October jobs report this Friday and the midterms and October CPI next week, so plenty of opportunity for more volatility.

By contrast, securing reliable longer term supply in an uncertain world is the priority for uranium end-users. Utilities are willing to pay higher prices for longer than average term contracts than is on offer from Russia, TradeTech reports, given (a) Russian imports could be banned by the US and/or Europe at any moment and (b) a desire to abandon Russia as a supplier.

Last week major producer Cameco reported quarterly earnings and revealed it had contracted 77mlbs U3O8 year to date in term contracts, mostly through off-market negotiations. Several utilities have indicated they will be entering the uranium market in coming weeks, TradeTech notes, through both formal channels and off-market discussions with suppliers.

TradeTech’s term price indicators remain at US$50.50/lb (mid) and US$53.00/lb (long).

Positive Reaction

Haywood Capital Markets last week reported encouraging support for small modular reactor development in Canada, with the government-administrated Canadian Infrastructure Bank committing CA$970m in funding to build a 300MW SMR in Ontario over the next ten years.

Canada’s Natural Resources Minister suggested the announcement “…represents a significant step towards the development of a non-emitting electricity grid and a prosperous net zero future. The deployment of one of Canada’s first small modular reactors…will further enhance Canada’s leadership in nuclear technology, create sustainable jobs and reduce emissions”.

Uranium companies listed on the ASX:

AGE 31/10/2022 0.0520 0.00% $0.12 $0.04
BKY 31/10/2022 0.2600 – 3.70% $0.64 $0.14
BMN 31/10/2022 2.0900 1.95% $2.49 $0.15
BOE 31/10/2022 2.6500 2.73% $3.10 $0.28 $3.300 24.5%
DYL 31/10/2022 0.8200 0.00% $1.25 $0.55
ERA 31/10/2022 0.2050 0.00% $0.44 $0.16
LOT 31/10/2022 0.2300 6.98% $0.46 $0.19
NXG 31/10/2022 6.4200 0.00% $8.99 $0.00
PDN 31/10/2022 0.8550 3.03% $1.03 $0.53 -149.4 $1.100 28.7%
PEN 31/10/2022 0.1700 3.03% $0.31 $0.14
SLX 31/10/2022 2.9200 4.18% $4.14 $0.99

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